Comparative financial statements include the financial statements of a prior period that were examined by a predecessor auditor whose report is not presented. If the predecessor auditor's report was qualified, the successor auditor must:
A)obtain written approval from the predecessor auditor to include the prior year's financial statements.
B)issue a standard comparative audit report indicating the division of responsibility.
C)express an opinion on the current year statements alone and make no reference to the prior year statements.
D)disclose the nature of and reasons for any qualification in the predecessor auditor's opinion.

Question

Quizplus · Accepted Answer

The successor auditor should disclose the nature of and reasons for any qualification in the predecessor auditor's opinion when the predecessor's report is not presented but the financial statements they audited are included for comparative purposes. This ensures that users of the financial statements are aware of any issues that affected the prior period's audit opinion.

Comparative Financial Statements Include the Financial Statements of a Prior