Beem & Lord,a PA firm,audited the financial statements of Frazer Inc.Since this was a first time audit,Beem & Lord did not audit the comparative financial statements,as this was done by the previous auditor.Beem & Lord should expand their report to include an explanation in
A)the scope paragraph.
B)the management responsibility paragraph.
C)the opinion paragraph.
D)a paragraph following the opinion paragraph.

Question

Quizplus · Accepted Answer

The best choice is to include a separate paragraph following the opinion paragraph that explains why the comparative financial statements were not audited by the current auditor. This is because the opinion paragraph is reserved for expressing the auditor's opinion on the financial statements, while the scope paragraph focuses on the auditor's overall responsibilities and procedures performed during the audit. The management responsibility paragraph deals with the responsibility of the company's management for the financial statements. Therefore, a separate paragraph following the opinion paragraph is the most appropriate place to provide the necessary explanation.

Beem & Lord,a PA Firm,audited the Financial Statements of Frazer