Reporting with Different Opinions and Other Auditors

Question 1

CY Qualified with Unmodified PY

Different Opinions - non issuer

Answer 1

Nothing changes

Question 2

CY Unmodified with Disclaimer PY

Different Opinions - non issuer

Answer 2

• Basis for Disclaimer of Opinion
• Disclaimer of Opinion
  Ex. LY is disclaimed because of cash flow statement. This year CFS will not have a trustworthy bbalance.

Question 3

CY Qualified with Unqualified PY

Different Opinions - issuer

Answer 3

Nothing Changes

Question 4

CY Qualified with Disclaimer PY

Different Opinions - issuer

Answer 4

Express Opinion BS=Both Years

CF only year being audited.

Question 5

Updating Prior Opinions

Answer 5

-do so in current audit
-emphasis of matters or other-matters (non issuer)
-explanatory paragraph (issuer)
D - Date of the auditors prior report
O - Opinion type previously issued
R- Reason for the prior opinion
C- Changes that have occurred
S - Statement that the “opinion…. is different.”

Question 6

Old CPA should….

Reporting with Predecessor Auditor

Answer 6

Old CPA should…

• read CY statements, Compare CY with PY.
• obtain a letter of rep… from current (successor auditor).
• obtain a letter of rep.. from management
• unrevised - original date
• revised - dual date

Question 7

New CPA should… - not reissued

Reporting with Predecessor Auditor

Answer 7

• ONLY use other-matter paragraph and explanatory paragraph
• prior period were audited by prior auditor (predecessor)
• type of opinion by old auditor
• nature of any emphasis of matter, other-matter, or explanatory paragraph included in old auditor report
• date of the predecessor auditors report.

Question 8

Prior Period Not Audited
(but)
Reviewed or Compiled

Answer 8

• ONLY use other-matter paragraph and explanatory paragraph
• service performed in prior period
• date of prior period report
• any material modifications
• services less in scope than an audit.

Question 9

Prior Period Not Audited, Reviewed, or Compiled

Answer 9

• ONLY use other-matter paragraph and explanatory paragraph

- auditor assumes no responsibility for prior year.

Question 10

Group engagement Team must understand the following of the component auditor.

Answer 10

Must oversee…..

• reputation
• independence
• professional competency
• program steps

Question 11

Group Engagement Auditor should use the understanding of each component auditor to determine to make reference.

Answer 11

• make no reference - assume responsibility

- make reference - divide responsibility

Question 12

Making reference to component auditor

Answer 12

MUST meet two requirements

• component auditor has performed an audit
• component audit is not restricted.
• If a modified opinion state in other-matters paragraph & explanatory paragraph.
• Auditors Responsibility Paragraph - “we did not audit the financial statements of x company”.