William Gregory, CPA, is the principal auditor for a multi-national corporation.Another CPA has examined and reported on the financial statements of a significant subsidiary of the corporation.Gregory is satisfied with the independence and professional reputation of the other auditor, as well as the quality of the other auditor's examination.With respect to his report on the consolidated financial statements, taken as a whole, Gregory:
A)must not refer to the examination of the other auditor.
B)must refer to the examination of the other auditor.
C)may refer to the examination of the other auditor.
D)must refer to the examination of the other auditors along with the percentage off consolidated assets and revenue that they audited.

Question

Quizplus · Accepted Answer

Gregory may refer to the examination of the other auditor, but it is not required. The decision to refer to the other auditor's examination is at the discretion of the principal auditor, based on their assessment of the other auditor's independence, professional reputation, and the quality of their work. However, if Gregory does decide to refer to the other auditor's examination, he must clearly indicate the portion of the consolidated financial statements that were audited by the other auditor.

William Gregory, CPA, Is the Principal Auditor for a Multi-National