Hart,CPA is auditing the year 2 financial statements of Kell Co.Previously,Hart audited Kell's year 1 financial statements and expressed a qualified opinion due to a scope limitation.Hart decides to include an other-matter paragraph in the year 2 report because comparative financial statements are being presented for year 2 and year 1.This paragraph should indicate the
A)Substantive reasons for the prior year's qualification.
B)Reason that Hart continued to provide audit services,despite the previous scope limitation.
C)Consistency of application of accounting principles between year 2 and year 1.
D)Restriction on the distribution of the report.

Question

Quizplus · Accepted Answer

The other-matter paragraph should provide information about the prior year's qualification, as it may affect the comparability of the financial statements presented. This will help readers understand the context of the qualification and its impact on the current year's financial statements.

Hart,CPA Is Auditing the Year 2 Financial Statements of Kell