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.
QUESTION: 85
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:

A. Express an unqualified opinion concerning the restated financial statements.
B. Be accompanied by the original auditor's report on the prior period.
C. Bear the same date as the original auditor's report on the prior period.
D. 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
QUESTION: 86
Which of the following statements is not true regarding the auditor's responsibility for
subsequent events?

A. The auditor has an active responsibility to make continuing inquiries between the date of the
auditor's report and the date on which the report is submitted.
B. The auditor has an active responsibility to make continuing inquiries between the date of the
financial statements and the date of the auditor's report.
C. The auditor has an active responsibility to make continuing inquiries between the date of the
financial statements and the date on which sufficient appropriate audit evidence has been
obtained.
D. The auditor has no active responsibility to make continuing inquiries after the date of the
auditor's report.
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