Study Unit 17 - Related Reporting Topics

Question 1

What is the period covered by interim financial information (IFI)?

Answer 1

Interim financial information (IFI) overs a period of
- Less than a full year or
- The 12 months ending on a date other than fiscal year end.

Question 2

What is the most common type of engagement performed on interim financial information?

Answer 2

A review of interim financial information is commonly performed to enable the auditor to state whether (s)he is aware of any material modifications needed for the information to be in accordance with the framework.

Question 3

What are the two types of procedures a review of interim financial information primarily involves?

Answer 3

• Analytical procedures
• Inquiry of persons responsible for financial and accounting matters

Question 4

If management does not comply with the request that the review report accompany the interim financial information, how should the auditor respond?

Answer 4

The auditor should request that his or her name not be associated with the interim financial information or referred to.

Question 5

In a review report of interim financial information, how must each page of the interim financial information be marked?

Answer 5

Each page of the interim financial information must be clearly marked as unaudited.

Question 6

What are the auditor’s procedures and reporting responsibility for other information in documents containing audited financial statements?

Answer 6

Auditor’s procedures Read for material inconsistency with the financial statements

Reporting responsibility Describe any material misstatement or inconsistency of the other information in the Other Information section of the auditor’s report

Question 7

What are the auditor’s procedures and reporting responsibility for required supplementary information (RSI)?

Answer 7

Auditor’s procedures - Apply limited procedures (e.g., inquiry, compare for consistency)

Reporting responsibility - Include a separate section in the auditor’s report with the heading “Required Supplementary information”.

Question 8

What are the auditor’s procedures and reporting responsibility for supplementary information in relation to the financial statements?

Answer 8

Auditor’s procedures - Audit

Reporting responsibility - Refer to and report on the supplementary information in a
- Separate report or
- A separate section in the auditor’s report with the heading “Supplementary Information”

Question 9

What are the auditor’s procedures and reporting responsibility for summary financial statements?

Answer 9

Auditor’s procedures - Determine whether summary financial statements are consistent with audited financial statements

Reporting responsibility - In a separate report, refer to the audit report and state opinion about consistency with complete financial statements

Question 10

How does the type of opinion expressed on the audited financial statements affect the opinion expressed on the summary financial statements relating to the audited statements?

Answer 10

Opinion on audited Opinion on summary statements
Statements

							Unmodified if consistent with audited statements Unmodified
							Adverse if not consistent with audited statements

Adverse/disclaimer Withdraw from engagement (No opinion)

Qualified/emphasis-of-
matter/other-matter/
Going concern/ Basis for additional issues addressed
Communication of key
Audit matters

Question 11

When should a report on summary financial statement be dated?

Answer 11

The auditor’s report should be dated no earlier than
- The date on which the auditor has obtained sufficient appropriate evidence on which to base the opinion and
- The date of the auditor’s report on the audited statements.

Question 12

If the financial statements prepared in accordance with a financial reporting framework generally accepted in another country are used only outside the United States, how are the statements reported in the auditor’s report?

Answer 12

The auditor may report using either
1. A U.S. form of report
2. The other country’s form of report

Question 13

If the financial statements prepared in accordance with a financial reporting framework generally accepted in another country are used both inside and outside the United States, how are the statements reported in the auditor’s report?

Answer 13

The auditor should report using the U.S. form of report and include an emphasis-of-matter paragraph in the auditor’s report.

Question 14

Give examples of special purpose frameworks used to prepare financial statements.

Answer 14

Special purpose frameworks are referred to as other comprehensive bases of accounting (OCBOA) and include the following:
- Cash basis
- Tax basis
- Regulatory basis
- Contractual basis