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Hi Tutor,
Could you kindly exlpain, with regards to ”Opeing balances”, If the predecessor auditor’s opinion regarding the prior period’s financial statements included a modification to
the auditor’s opinion that has now corrected in current year’s financial statement, what impact would there be on the current year’s audit report?Thank you.
ISA 510 Initial Audit Engagements – Opening Balances states:
“If the predecessor auditor’s opinion regarding the prior period’s financial statements included a modification to the auditor’s opinion that REMAINS relevant and material to the current period’s financial statements, the auditor shall modify the auditor’s opinion on the current period’s financial statements …”
So if it’s corrected it it no longer relevant. Consider though, that if it was a material error it will have been corrected retrospectively (IAS 8) and in this way brought to the attention of the users of the financial statements.
(If you browse the web for an ISA xxx you can often find a pdf – e.g. here http://www.ifac.org/system/files/downloads/a025-2010-iaasb-handbook-isa-510.pdf)
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