[Anonymous]

Hi,

So I just came across a question in the Wiley CPA Test Bank online and I can’t figure out why the correct answer is correct. Help?

The question is: When financial statements of a prior period are presented on a comparative basis with financial statements of the current period, the continuing auditor is responsible for

• Expressing dual date opinions.

• Updating the report on the previous financial statements only if the previous report was qualified and the reasons for qualification no longer exist.

• Updating the report on the previous financial statements only if there has not been a change in opinion.

• Updating the report on the previous financial statements regardless of the opinion previously issued.

I thought the answer would be #2, but it turns out the answer is #4. I can’t find this information in their text and wondered if anyone else has come across this or knows why the auditor would update the report no matter what, I thought you could just reissue it unless you wanted to change something.

[kts1010]

The answer seems like #2 to me as well. Maybe the answer is wrong??

AUD - 08/20/12 - 82
REG - 10/30/12 - 82
FAR - 01/05/13 - 80
BEC - 04/15/13 - 84

[Anonymous]

I second that, I think 2 is the best answer as well…very strange/confusing

[momto5]

According to Becker: “Since the report date for the audit of the most recent financial statements is generally used, the auditor should update the report(s) on financial statement(s) previously issued. Update can mean reaffirm, or change, because of changed conditions or information coming to the auditor's attention during the current examination.” (p. A1-42 at the top, in case you have Becker)

So I am guessing that update, in this case, doesn't necessarily mean you change anything, but that you may also reaffirm the report as is.

FAR - 92 (4/27/12)
AUD - 96 (7/17/12)
BEC - 92 (8/30/12)
REG - 91 (11/12/12)

[Anonymous]

@momto5, wow that is really subtle. Thanks for sharing what you have found. I feel like what I've learned from Yaeger is #2, this “update” term wasn't emphasized.

It's little things like this that I think really stress people out. You can have such a good overall understanding of the material, but weird wording that you haven't learned could trip you up. It sure is demeaning when you are studying.

I only have one week left for goodness sakes! I want to be reviewing, not learning more little things! 🙂

[momto5]

I totally agree! At first glance, I would have picked #2 as well. It is only knowing that someone said it was wrong that made me look more into it. That is the scary part about these exams – you can think you know it well and did well on the exam, but in reality you missed some minor concepts or wording like this (wasn't even highlighted!) and your “right” answers become wrong ones!

FAR - 92 (4/27/12)
AUD - 96 (7/17/12)
BEC - 92 (8/30/12)
REG - 91 (11/12/12)

[kts1010]

Wow thank you for the find. I have highlighted that in my becker book for later review. That is crazy the little wording like that, hopefully won't be to many of those when I take the test. 🙂

AUD - 08/20/12 - 82
REG - 10/30/12 - 82
FAR - 01/05/13 - 80
BEC - 04/15/13 - 84

[Author]

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