so let's start out by looking at other information in documents containing
audited financial statements as high like that now the general rule is an
auditor is not responsible
for determining whether the other information in the documents you know
is a properly stated generally were not responsible what kind of other
information are you talking about here
well we're talking about a report by management or those charged with
governance
financial summaries are highlights employment data
planned capital expenditures financial ratios
names of officers and directors and selected quarterly data
that's kind of the other information we're talking about well what happens if
it's
materially inconsistent so there's a material inconsistency what I like that
well go down to let her be other information
requires revision high like that and underscore requires
revision and we're gonna highlight one two and three
number one include in the auditor's report
and other matters paragraph describing the material inconsistency
by the way you you underscored
requires revision now underscore
other matters paragraph you might want to link them together
so again the required revision goes in and other matters not in emphasis
matters Justin other matters paragraph number two
withhold you some the report or withdraw from the engagement
and consult with legal counsel why would you do that
put down after after number three false
fraudulent deceptive
misleading that's when you would withdraw
so false fraudulent
deceptive or misleading and underscore the word withdraw
and then draw some arrows going on to our next page
right number three topped the next page highlight material
misstatement a fax now I'm gonna read starting on the fourth line
if management refuses to take corrective actions the auditor should request that
management
consult with a qualified third party such as the entities legal counsel
and the auditor should consider the advice received from the third party
in determining whether the matter is a material misstatement of fact
now high like this when the auditor concludes that there
is a material misstatement of fact that management refuses to correct
the order would notify those charged with governance
what we gonna do now I'll take a look at be disclaimer of opinion
on other information high like that and it's optional
and then go down to the last sentence
and highlight other matters paragraph you're gonna have to add that in
so underscore disclaimer underscore other matters paragraph and how to link
them together
alright Roman numeral two reports on
supplementary information in relation to the financials as a whole
I in letter A first line at the end
this is outside the basic financial statements letter B
second line the auditor has two objectives
in such an engagement because you're reporting on it
so you have two objectives objective number one
highlight to evaluate the presentation at the supplementary information
in relation to the financials as a whole and
number two to report on whether the supplementary information is fairly
stated
in all material respects in relation to the financials
as a whole now what are the conditions for reporting which is released
the information was derived from or relates directly to the information used
in preparing the financials
the information relates to the same period
the financials were audited and the order issued in
auditor's report
neither an adverse nor disclaimer in other words there wasn't a significant
pervasive problem and the supplementary information will accompany the audited
financial statements or audited statements will be made
readily available by the entity so with all those
then what is management's responsibility what I like just the top
the auditor must obtain an agreement %uh
management that in technologies and understands
its responsibility so again management has to acknowledge that they are the
ones responsible for this
what are your audit procedures letter E but I like that
and we're going to highlight as blurbs from each of these
what are your audit procedures number one let's highlight inquirer management
to determine whether the form
and content of the information complies with applicable criteria
3 obtain an understanding that the methods used to prepare the information
for compare and reconcile the information to the
audited financial statements 5
inquire regarding any significant assumptions
sex evaluate the appropriateness and completeness of the information
and seven obtain a written representation from management regarding
the information
and by the way after you've highlighted number seven
put a little star next because getting that Rep letter has been a frequent
multiple choice question in the past
let's go
highlight reporting the auditor's report on the supplementary information
may either be presented as other matters paragraph
I and by the way up to you to other underscore other matters paragraph
now I'm gonna come back to that in just a moment
but go down to number two or
number two a separate report highlight that
and underscore that now kinda like those two up you underscore the other matters
paragraph
and you underscored the separate report
kinda like them up with the Lord one
or the other now in the
other matters paragraph I just wanna go to the very last
wine and as I read about like you to underscore
our opinion underscore that the information is
underscore fairly stated in all material respects
in relation to the financial statements so that would be the other matters
paragraph but if you want a separate report
let's go down to number two when reporting separately the report should
include a reference to the report
on the financial statements that day that report
the nature of the opinion on that financial any report modification
alright what you made those highlights let's go to Roman numeral 3 on the next
page
required supplementary information but I like that
now the auditor's opinion on the financials does not cover the required
supplementary information
so what are required procedures
and by the way putting brackets next to that limited
procedures there are only limited procedures that you have to do
alright number one highlight make enquiries a management number to
determine if the supplementary information is consistent with
management's response is
audited financials and other knowledge and number three obtain written
management representations
regarding the required supplementary information
and by the way there's that management reprehensible to start next that since
that has been a frequent prior question
that candidates have been challenged with now reporting on it
an opinion is not required as I mentioned the auditor is not required
to audit required supplementary information however
the audit report on the financials now highlight this should include
and other matters paragraph with language to explain the following
circumstances as applicable I so high like that and then underscore
other matters paragraph and we're going to highlight
a through air the required supplementary information is included
and the auditor has applied required procedures those limited procedures we
just spoke about
the required supplementary information is omitted
if that happens to be the case see
some require supplementary information is missing and some is presented in
accordance with prescribed guidelines
d the auditor has identified
material departures from the prescribed guidelines
he the auditor is not able to complete the required procedures or
there are unresolved doubts about conformity
%uh require supplementary information now
would you put a bracket around be through
ass put a bracket around them and then out in the margin put report
deficiencies and omissions report
deficiencies and omissions where do you report them
in your other matters paragraph so report deficiencies
and omissions and then the next line I'd like to highlight this
other matters paragraph should include a disclaimer opinion
I would you please underscore that as well
alright going to Roman numeral for the next page
but I like reports on a application of the requirements
up in applicable other applicable financial reporting framework
and now the margin which put application gap
now this could be again some other framework
this could be governmental auditing standards
this could be some other ACH bowler kinda system et cetera
let's go down to 82 and highlight
the reporting accountant may not report
on the application of the accounting principles to a hypothetical transaction
a transaction not involving facts and circumstances so you can't do that
so after you highlighted that underscore not report
on a hypothetical transaction not report on a hypothetical transaction
number three were gonna high like this the reporting account is not required to
be independent
up the entity in this case now
would you underscore after you highlighted not required to be
independent now I'm gonna have you come back up and running arrow down to
something a little bit later in fact
just right arrow from 83 draw an arrow
all the way down to the very last item number eight under D
a we'll talk about that later draw an arrow all the way down
2d a well come back and talk about that so procedures for reporting accountant
obviously obtain an understanding of the form and substance of the specific
transaction
review the relevant requirements and consult with other professionals
again the reporting accounting consulting accounting
should request permission from the entities management to consult
again you gotta talk to the continuing account and then should consult with the
continuing count ascertain
all available relevant facts so what is the reporting accountants report gonna
look like we're going to highlight
1 through a okay we're going to highlight these a brief description of
the nature of the engagement
a statement at the engagement was performed in accordance with AICPA
standards
and identification up the specific entity
a description of the specific transaction a statement at the relevant
facts circumstances assumptions
and a statement about the source of the information a statement describing the
appropriate application have the requirements
up the applicable financial reporting framework
including the country of origin to the specific transaction or type a report
and if applicable a description of the reason for the reporting accounts
conclusions
a statement that the preparer the financials
who should consult with their continue account are responsible
a statement that any difference in fact circumstance
or sumptin present it may change the report a separate paragraph that the
end to the report restricting its use to specific parties
and by the way after you highlighted that underscore restricting the use to
specific parties
because this is a very unique report you want to keep it to only those who
understand it
and that number eight what you do the arrow down highlight it the reporting
account is not independent which is
which is allowable a statement indicating the lack of independence
so put a star next to that now by the way
back up by number five a statement that the preparers at the financial who
should consult with their continuing accounts are responsible
who are the preparers management so out on the margin put management is
responsible
management is responsible and by the way at the bottom why we put restrict use to
you can restrict the use to management
Board of Directors specific parties
and after specific parties why don't you put prior
and current auditors prior
and current auditors
all right let's jump
page Roman numeral five reporting on financial statements prepared in
accordance with the Financial Reporting Framework
generally accepted in another country
and by the way take a look at the passkey now that the AICPA
has designated that the International Accounting Standards Board
as a body other stab with generally accepted accounting principles
these rules the international rules are not
applicable two engagements to report on financials prepared in accordance with I
first so again
now that that's their its other items let's go into engagement acceptance
letter A
and on the second line the auditor should obtain an understanding
I'll number one highlight the purpose
and number three the intended users I
let's go on to the next page
highlight
boarding distribution outside the United States
highlight for distribution only outside the United States and underscore
only outside the United States highlight the auditor may use
either number one highlight the report
up the other country or the other report
said out in the US in the International Standards Association
or number 21 or the other US former the report high like this
that reflects the financial statements being reported on having been prepared
in accordance with the Financial Reporting Framework generally accepted
in another country
so it's one or the other it's going to be
only outside the United States let's go today
reporting distribution in the United States
and after you highlighted that underscore in the United States
on the second line reporting report using a US for
I a US former Port with an emphasis
up matters paragraph now after you highlighted that
underscore emphasis on matters paragraph number one
highlight identifying the Financial Reporting Framework to
refers to the notes and three indicates that the framework differs
alright turn to the next page for example
now this example is for use only
outside the United States so underscore
use only outside the United States
you'll know again the balding areas which
as described by no tax in the financials have been prepared on the basis Bob
Loblaw
in such and such a country if you notice in management's responsibility
you mention the specific framework then the auditor's responsibility your name
the country
and then in the opinion paragraph again
that again that they were in accordance with and specifically identified
the Financial Reporting Framework generally accepted in what country
so you can see that there's some unique added
language
now let's go to the more familiar one use
in the United States here we're gonna say
again in the introduction which has described by again no tax has been
prepared on the basis
in another country's methodology in the management responsibility we mention
that framework
as part of management responsibility in our opinion
we give an opinion again based on that specific item
and there's our emphasis on matters paragraph wanted to put a star next to
the emphasis
matters paragraph as described in Note acts
the company prepared its financials in accordance with something else in
another country
and it differs from the accounting generally accepted in the United States
our opinion is not modified with respect to this matter
alright with that you're now ready to try your last group multiple choice
questions
good
as of August 13th a CPA had obtain sufficient
appropriate audit evidence with respect to the field work on an engagement to
audit the financials for the year in June 30
on August 27 an event came to the CPA's attention that should be disclosed in
the notes
so it's a tight one item again maybe
maybe it's a tight chill but again maybe a type 1 this event was properly
disclosed
by the entity but the CPA decided not to do all day
the auditor's report and David the report as of August 27
mmm that means they're taking responsibility for all subsequent events
therefore again let array is the correct answer all subsequent events that
occurred
through that we are taking responsibility
now in this question it states and auditor concludes that a substantive
audit procedure
considered necessary during the again prior year's audit was omitted
we forgot to do it and there are persons currently relying on those
reports the auditor most likely would probably apply the omitted procedure
F one the omitted procedure in Paris the auditors present ability to support the
previously expressed opinion
there's your answer letter D remember what you do is say oh boy
that's a problem we will be the look to see alternative audit procedures
satisfied it and if not we would either do the related procedure remember are no
better late than
this question asks what is an auditor's responsibility for supplementary
information
such as the disclosure a pension information which is
outside the basic financials but required by
governmental auditing standards well
letter B the auditor should apply certain limited procedures
to the supplementary information and add an other
matters paragraph to the audit report just like the notes that we read
and followed up on
alright ladies and gentlemen we have taken a lot of your precious time to
cover a lot of valuable information
but again you're looking at 12 Dean 18 points
that could come from this kind of an area so obviously it's worth all the
time that we've spent
Use the Memory tools as you see fit make sure you read over the material
and work all the questions that we have in our software
and you'll be well prepared to get this part the exam
nailed I look forward to seeing you in order to good luck with your studying
until then