Before reporting on the financial statements of a Canadian entity that have been prepared in accordance with the accounting principles of another country,an auditor practising in Canada should ________.

Question

Quizplus · Accepted Answer

If an auditor practicing in Canada is reporting on the financial statements of a Canadian entity that have been prepared in accordance with the accounting principles of another country, understanding the accounting principles that are generally accepted in the other country is necessary. This would allow the auditor to assess whether the financial statements comply with generally accepted accounting principles in the other country and whether they are presented fairly in all material respects. Being certified by the appropriate auditing or accountancy board of the other country (B) is not necessary for this purpose. Similarly, notifying management that the auditor is required to deny an opinion on the financial statements (C) is not appropriate unless the financial statements are so materially misstated that a disclaimer of opinion is necessary. Recasting the financial statements according to Canadian GAAP (D) is not necessary either unless the auditor has determined that the financial statements are materially misstated and require adjustments to comply with Canadian GAAP.

Before Reporting on the Financial Statements of a Canadian Entity