Opening balances in an initial audit
Opening balances are account balances at the beginning of the period. In an initial engagement, the auditor obtains sufficient appropriate evidence that they do not contain misstatements materially affecting the current-period statements and that relevant accounting policies are consistently applied or appropriately changed.
Worked example
A new auditor examines prior working papers where available and tests opening inventory through current-period evidence and other procedures.
Common mistake
A prior unmodified opinion does not automatically replace the new auditor’s responsibilities for opening balances.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Direct | September 2026–June 2027 |