CAF-8 · Chapter 14 · Question 7 of 10
The financial statements of the prior year were audited by a different firm of Chartered Accountants. The incoming auditor wants to explicitly mention this fact in the current year's audit report. Where should this be placed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) In an Other Matter paragraph.
Explanation
An Other Matter paragraph is used to communicate matters relevant to users' understanding of the audit or the auditor's responsibilities, which are NOT required to be disclosed in the financial statements. Noting that predecessor auditors audited the prior year is a classic example.
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