Charlie Company's comparative financial statements include the financial statements of the prior year that were audited by predecessor auditors whose report on those financial statements is not presented.If the predecessor's report was qualified,the successor auditors should
A) Indicate in their report the substantive reasons for the qualification issued by the predecessor auditors.
B) Request the entity to reissue the predecessor's report on the prior-year statements.
C) Issue an updated comparative report on the entity's financial statements, indicating the division of responsibility.
D) Express an opinion only on the current-year financial statements and make no reference to the prior-year financial statements or opinion.

Question

Quizplus · Accepted Answer

If predecessor auditors issued a qualified report, the successor auditors should indicate in their report the substantive reasons for the qualification issued by the predecessor auditors. This is required by Auditing Standard No. 310, which states that the successor auditor's report should indicate whether the financial statements of the prior period were audited by a predecessor auditor and discuss the nature of any significant reservations expressed by the predecessor auditor.

Charlie Company's Comparative Financial Statements Include the Financial Statements of the Prior