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AICPA CPA-Auditing Exam
CPA Auditing and Attestation (AUD) (Page 18 )

Updated On: 9-Feb-2026
Page 18 of 207
PDF with 1026 Questions

Before reissuing the prior year's auditor's report on the financial statements of a former client, the predecessor auditor should obtain letters of representation from the:

  1. Former client's management and the board of directors.
  2. Former client's attorney and management.
  3. Former client's board of directors and the successor auditor.
  4. Successor auditor and the former client's management.

Answer(s): D

Explanation:

Choice "d" is correct. Before reissuing the prior year's auditor's report on the financial statements of a former client, the auditor should 1) read the financial statements of the current period, 2) compare the prior-period information that the auditor reported on with the financial statements to be presented for comparative purposes, 3) obtain a letter of representation from the successor auditor, and 4) obtain a letter of representation from the former client's management. The representation letter from the successor auditor will state whether the successor's audit revealed any issues of a material nature that might affect the previous financial statements. The representation letter from the former client's management will indicate whether its previous representations are still accurate and whether there have been any subsequent events affecting the previous financial statements. Choices "a", "b", and "c" are incorrect. The predecessor does not request representation letters from the former client's board of directors or attorney.



In May X4, an auditor reissues the auditor's report on the X2 financial statements at a continuing client's request. The X2 financial statements are not restated and the auditor does not revise the wording of the report. The auditor should:

  1. Dual date the reissued report.
  2. Use the release date of the reissued report.
  3. Use the original report date on the reissued report.
  4. Use the current-period auditor's report date on the reissued report.

Answer(s): C

Explanation:

Choice "c" is correct. If the auditor reissues the audit report at the client's request, the auditor should use the original report date on the reissued report. Use of a subsequent date implies that the auditor has done additional work.
Choice "a" is incorrect. Use of a date subsequent to the original report date implies that the auditor has performed work subsequent to that date.
Choice "b" is incorrect. Use of a date subsequent to the original report date implies that the auditor has performed work subsequent to that date.
Choice "d" is incorrect. Use of a date subsequent to the original report date implies that the auditor has performed work subsequent to that date.



An auditor expressed a qualified opinion on the prior year's financial statements because of a lack of adequate disclosure. These financial statements are properly restated in the current year and presented in comparative form with the current year's financial statements. The auditor's updated report on the prior year's financial statements should:

  1. Be accompanied by the auditor's original report on the prior year's financial statements.
  2. Continue to express a qualified opinion on the prior year's financial statements.
  3. Make no reference to the type of opinion expressed on the prior year's financial statements.
  4. Express an unqualified opinion on the restated financial statements of the prior year.

Answer(s): D

Explanation:

Choice "d" is correct. If an auditor has previously qualified his or her opinion on financial statements of a prior period, and the prior period statements are restated to conform with GAAP, the auditor should express an unqualified opinion on the restated financial statements. In addition, the auditor would state the substantive reasons for the change in opinion in an explanatory paragraph preceding the opinion paragraph.
Choice "a" is incorrect. The original report would not be presented. Choice "b" is incorrect. The auditor would change the opinion on the restated financial statements from that previously issued.
Choice "c" is incorrect. The auditor would state the substantive reasons for the change in opinion in an explanatory paragraph preceding the opinion paragraph.



Comparative financial statements include the financial statements of the prior year that were audited by a predecessor auditor whose report is not presented. If the predecessor's report was qualified, the successor should:

  1. Indicate the substantive reasons for the qualification in the predecessor auditor's opinion.
  2. Request the client to reissue the predecessor's report on the prior year's statements.
  3. Issue an updated comparative audit report indicating the division of responsibility.
  4. Express an opinion only on the current year's statements and make no reference to the prior year's statements.

Answer(s): A

Explanation:

Choice "a" is correct. If the financial statements of a prior period have been audited by a predecessor auditor whose report is not presented, the successor auditor should indicate in the introductory paragraph of the audit report (1) that the financial statements of the prior period were audited by another auditor, (2) the type of report issued, and (3) if the report was other than standard, the substantive reasons therefor.
Choice "b" is incorrect. The predecessor auditor, not the client, may reissue the previous year's audit report.
Choice "c" is incorrect. An audit report would indicate a division of responsibility when the principal auditor's opinion is based in part on the report of another auditor. Choice "d" is incorrect. If the prior year's financial statements are issued, the previous year's audit opinion must also be disclosed.



An auditor has previously expressed a qualified opinion on the financial statements of a prior period because of a departure from generally accepted accounting principles. The prior-period financial statements are restated in the current period to conform with generally accepted accounting principles.
The auditor's updated report on the prior-period financial statements should:

  1. Express an unqualified opinion concerning the restated financial statements.
  2. Be accompanied by the original auditor's report on the prior period.
  3. Bear the same date as the original auditor's report on the prior period.
  4. Qualify the opinion concerning the restated financial statements because of a change in accounting principle.

Answer(s): A

Explanation:

Choice "a" is correct.
When prior-period financial statements are restated in the current period to conform with GAAP, the auditor's updated report on the prior-period financial statements should express an unqualified opinion concerning the restated financial statements. Choice "b" is incorrect. The original auditor's report on the prior period should not be presented. Choice "c" is incorrect. The original report date is used only if the original report is reissued unchanged.
Choice "d" is incorrect. A change in accounting principle that is properly accounted for does not result in a qualified opinion.
Events Occurring After Year-end






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