Supplementary Information Related to Financial Statements

Question 1

What is the auditors primary objective with respect to supplementary information?

Answer 1

Evaluate the presentation of the supplementary information and report on whether it is fairly stated

Question 2

What should the auditor determine when presented with supplementary information to include with the audited financial statements?

Answer 2

• Info derived from the underlying records used to prepare financial statements
• Same period
• Served as auditor to the F/S
• Unmodified or qualified opinion was expressed

Question 3

The auditor should obtain managements agreement that management has responsibility for…..

Answer 3

• Supplementary information
• ## Providing auditors with written representations

Question 4

What should the auditor do when presented with supplementary information (i.e. what should they do with the information presented to become comfortable with it?)

Answer 4

Inquire of management about the purpose

Understand the methods used

Reconcile the supplementary information to the F/S

Inquire of management about assumptions

Question 5

What are the two types of report forms that can be used for supplementary information and what are the rules?

Answer 5

1) Combined- Add a “other-matter” paragraph

2) Seperate from the audited F/S- Cross reference between the two reports