Question

Gole, CPA, is engaged to review the Year 2 financial statements of North Co., a nonissuer. Previously, Gole audited North’s Year 1 financial statements and expressed an unmodified opinion. Gole decides to include a separate paragraph in the Year 2 review report because North plans to present comparative financial statements for Year 2 and Year 1. This separate paragraph should indicate thatA. No auditing procedures were performed after the date of the Year 1 auditor's report.B. The Year 1 auditor's report may no longer be relied on.C. The Year 2 review report is intended solely for the information of management and the board of directors.D. There are justifiable reasons for changing the level of service from an audit to a review.

Answer 1

Answer:

The answer is: A) No auditing procedures were performed after the date of the Year 1 auditor's report.

Explanation:

Since Gole is including a separate paragraph in the review report for Year 2  to describe his responsibility for the previous period's financial statement (Year 1), he should include in that paragraph the fact that he didn't perform any more audit procedures after he presented his review report for Year 1.