When reporting on comparative financial statements where the financial statements of the prior year have been examined by a predecessor auditor whose report is not presented, the successor auditor should make:
A)no reference to the predecessor auditor.
B)reference to the predecessor auditor only if the predecessor auditor expressed a qualified opinion.
C)reference to the predecessor auditor only if the predecessor auditor expressed an unqualified opinion.
D)reference to the predecessor auditor in an explanatory paragraph regardless of the type of opinion expressed by the predecessor auditor.

Question

Quizplus · Accepted Answer

When reporting on comparative financial statements where the financial statements of the prior year have been examined by a predecessor auditor whose report is not presented, the successor auditor should make reference to the predecessor auditor in an explanatory paragraph regardless of the type of opinion expressed by the predecessor auditor. This is in accordance with Generally Accepted Auditing Standards (GAAS) which requires the successor auditor to adequately disclose the fact that the prior year's financial statements were audited by a different auditor. This helps to ensure transparency and consistency in financial reporting.

When Reporting on Comparative Financial Statements Where the Financial Statements