ACCA Strategic Professional · Advanced Audit and Assurance (International) · Auditor's reports
Brinton Ltd presents comparative financial statements for the prior year, which were audited by another auditor whose report was unmodified. The current auditor, Tolland & Co, is reporting on the full set where comparative financial statements are presented (not corresponding figures). The prior auditor's report has been reissued and is unmodified. Which statement is correct under ISA 710?
When comparative financial statements are presented, the auditor's opinion refers to each period presented. This contrasts with corresponding figures, where the opinion covers only the current period. Naming the predecessor auditor or re-auditing the prior period is not generally required.
- AThe auditor's opinion refers only to the current period figures
- BThe auditor's opinion refers to each period presented in the financial statementsCorrect
- CThe auditor must always disclose the prior auditor's name in the current report
- DThe prior period must be re-audited in full by the current auditor
Explanation
Under ISA 710, when comparative financial statements are presented, the auditor's opinion refers to each period for which financial statements are presented. With corresponding figures the opinion refers to the current period only. Naming the prior auditor is not mandatory, and full re-audit is not required.
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