Test Prep This preview shows page 7 - 9 out of 16 pages. 54.What is an auditor's responsibility for supplementary information, such as segment information, that isoutside the basic financial statements, but required by the FASB?A.The auditor has no responsibility for required supplementary information as long as it is outside thebasic financial statements.B.The auditor's only responsibility for required supplementary information is to assist in preparing thesupplementary information.C.The auditor is required to read the other information and consider whether such information isconsistent with the information in the financial statements.D.The auditor should apply tests of details of transactions and balances to the required supplementaryinformation and report any material misstatements in such information. We have textbook solutions for you! The document you are viewing contains questions related to this textbook. Intermediate Accounting: Reporting and Analysis Jones/Wahlen Expert Verified 55.All of the following are true with respect to the auditor's consideration of information other than theaudited financial statements that are included in an entity's annual report except: Get answer to your question and much more 56.When an auditor reports on financial statements prepared on an entity's income tax basis, the auditor'sreport should Get answer to your question and much more 57.An auditor's report on financial statements prepared in accordance with a basis of accounting other thangenerally accepted accounting principles should include all of the following except: Get answer to your question and much more Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 16 pages? Upload your study docs or become a Course Hero member to access this document We have textbook solutions for you!The document you are viewing contains questions related to this textbook. The document you are viewing contains questions related to this textbook. Intermediate Accounting: Reporting and Analysis Jones/Wahlen Expert Verified NEWS RELEASE 10/09/08FASB Issues Exposure Drafts on Going Concern and Subsequent EventsNorwalk, CT, October 9, 2008—The Financial Accounting Standards Board (FASB) today issued two separate but related Exposure Drafts (EDs) for public comment. The documents contain two proposed FASB Statements, Going Concern and Subsequent Events, intended to improve financial reporting by incorporating accounting guidance that originated as auditing standards into the body of authoritative literature issued by the FASB while converging U.S. generally accepted accounting principles and International Financial Reporting Standards. Including this guidance in authoritative accounting literature as well as in auditing standards emphasizes that accounting and reporting are the primary responsibility of an entity and its management, not its auditor. The proposed Statement on going concern would require that management of a reporting entity consider all available information about the future, which is at least, but not limited to, 12 months from the end of the reporting period, when assessing whether a going concern assumption is appropriate. Prior to the issuance of this proposed Statement, the time horizon for the going concern assessment was limited to one year beyond the date of the financial statements. The proposed Statement also would require disclosures when either the financial statements are not prepared on a going concern basis or there is substantial doubt as to an entity’s ability to continue as a going concern. The FASB believes this guidance belongs in the accounting literature because it is management’s responsibility to assess the ongoing viability of the reporting entity. The proposed Statement on subsequent events establishes general standards of accounting for and disclosure of events that occur subsequent to the balance sheet due date but before financial statements are issued or available to be issued. The Board added the notion of available to be issued to consider situations in which financial statements may not be widely distributed after the financial statements are prepared—as may be the case with some nonpublic entities. The proposed Statement also would require disclosure of the date through which management has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were issued or the date the financial statements were available to be issued. That disclosure would alert all users of financial statements that management has not evaluated subsequent events after that date. Constituents who wish to provide feedback on one or both of the EDs should do so in writing by December 8, 2008. The EDs, including information about how to submit comments on the proposed guidance, are available at www.fasb.org. About the Financial Accounting Standards Board Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org. What is an auditor's responsibility for supplementary which is outside the basic financial statements but required?When supplementary information required by GAAP is presented outside the basic financial statements in an auditor-submitted document, the auditor should (a) express an opinion on the information if the auditor has been engaged to examine the information, (b) report on the information using the guidance in paragraphs .
What is an auditor's responsibility when engaged to report on supplementary information accompanying the basic financial statements?The auditor should apply certain limited procedures to the required supplementary information and report deficiencies in, or omissions of, such information. Investment and property schedules are presented for purposes of additional analysis in an auditor-submitted document.
What should be included in the auditor's report on supplemental information?A description of any significant assumptions or interpretations underlying the measurement or presentation of the supplemental information, and a statement that management believes that such assumptions or interpretations are appropriate.
What is the auditors responsibility for reporting on other information accompanying financial statements?Auditors are required to report on other information only if it is misstated or inconsistent with the financial statements. C) Auditors are required to provide reasonable assurance with respect to whether the other information is presented in accordance with generally accepted accounting principles.
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