Charlie Company's comparative financial statements include the financial statements of the prior year that were audited by predecessor auditors whose report on those financial statements is not presented.If the predecessor's report was qualified,the successor auditors should
A)Indicate in their report the substantive reasons for the qualification issued by the predecessor auditors.
B)Request the entity to reissue the predecessor's report on the prior years' statements.
C)Issue an updated comparative report on the entity's financial statements,indicating the involvement of component auditors.
D)Express an opinion only on the current-year's financial statements and make no reference to the prior years' financial statements or opinion.

Question

Quizplus · Accepted Answer

If the predecessor auditor's report was qualified, the successor auditor should indicate in their report the substantive reasons for the qualification issued by the predecessor auditor. This is required by auditing standards to provide users of the financial statements with relevant information about the prior year's financial statements. Simply expressing an opinion only on the current year's financial statements or issuing an updated comparative report are not appropriate responses, and requesting the entity to reissue the predecessor's report is not the responsibility of the successor auditor.

Charlie Company's Comparative Financial Statements Include the Financial Statements of the Prior