Supplementary information related to financial statements

Question 1

If the auditor has expressed an adverse opinion or disclaimer of opinion on the financial statements taken as a whole, how would that affect the engagement to report on whether supplementary information is fairly stated in relation to the financial statements?

Answer 1

The auditor would be prohibited from reporting on the supplementary information if the auditor’s report on the financial statements contained an adverse opinion or disclaimer of opinion.

Question 2

When engaged to report on whether supplementary information is fairly stated in relation to the financial statements, must the auditor issue a separate report on the supplementary information?

Answer 2

The auditor may either issue a separate report on the supplementary information or combine the report on the supplementary information with the report on the financial statements. If using a combined report, the auditor should add an other-matter paragraph to report specifically on the supplementary information.

Question 3

What are the requirements for an auditor to accept an engagement to report on whether supplementary information is fairly stated in relationship to the financial statements?

Answer 3

1. )The supplementary information must relate to the same period as the financial statements.
2. )The auditor must have audited the financial statements.
3. )The auditor must have expressed an unmodified or qualified opinion on the financials.
4. )The supplementary information will either accompany the financial statements or be made readily available by the entity.

Question 4

What does the term “readily available” mean?

Answer 4

It means that no further action by the entity is required. Being available through the entity’s Web site would be considered readily available, but being available upon request would not be considered readily available.