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Hello Miss, my note have quoted at below :
“When reporting on prior period financial statements in connection with the current period’s audit, if the auditor’s opinion on the prior period financial statements differs from the opinion the auditor previously expressed (ISA 710)”My question is why the auditor will have to audit the prior period FS in connection of current year audit? In what circumstances this will be happen? Thank you.
It doesn’t say prior period FS are being audited (that is HISTORY) only that there is some reporting on them.
This rather obscure provision concerns COMPARATIVE FS – which are also obscure – and I can’t say I have ever seen comparative information presented as comparative FS rather than corresponding amounts.
There are two ways in which comparative information can be presented which affects how the auditor reports on it:
1. corresponding figures and
2. comparative FS.
In the UK, for example, the law specifies (1) – I have never seen (2) in practice.1 is what you will see if you look at any annual report on the internet – on every page against the current column of #s you will see last year’s equivalent amounts.
2 means that the current year FS are presented as a set with single columns of #s followed by the prior year FS presented as a set.The essential audit reporting differences between the approaches are:
1. For corresponding figures, the auditor’s opinion on the financial statements refers to the current period only.
2. For comparative financial statements, the auditor’s opinion refers to each period for which financial statements are presented.
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