All of the following are true with respect to the auditor's consideration of information other than the audited financial statements that are included in an entity's annual report except:
A. The auditor is under no obligation to perform audit procedures on this other information.
B. The auditor must consider whether the other information is consistent with the information contained in the audited financial statements.
C. The auditor must request that material inconsistencies be corrected.
D. The auditor must perform audit procedures on this other information.
Answer: The auditor must perform audit procedures on this other information.
When an auditor reports on financial statements prepared on an entity's income tax basis, the auditor's report should
A. Be titled so that the financial statements are not confused with statements prepared to conform to generally accepted accounting principles.
B. Disclaim an opinion on whether the statements were examined in accordance with generally accepted auditing standards.
C. Not express an opinion on whether the statements are presented in conformity with the basis of accounting used.
D. Include an explanation of how the results of operations differ from the cash receipts and disbursements basis of accounting.
Answer: Be titled so that the financial statements are not confused with statements prepared to conform to generally accepted accounting principles.
The auditor's best course of action with respect to "other financial information" included in an annual report containing the auditor's report is to
A. Indicate in the auditor's report that the "other financial information" is unaudited.
B. Consider whether the "other financial information" is accurate by performing a limited review.
C. Obtain written representations from management as to the material accuracy of the "other financial information."
D. Read and consider the manner of presentation of the "other financial information."
Answer: Read and consider the manner of presentation of the "other financial information."
