TOP AUDITING ISSUES FOR 2013 - CCH

MODULE 3 — CHAPTER 9 — Reporting on Supplementary Information 103
STUDY QUESTION
4. Which of the following statements best describes the auditor’s reporting
responsibilities for other information under SAS 118?
a. SAS 118 requires auditors to consider the effects of material inconsistencies
or misstatements of fact on the financial statements and the related auditor’s
report.
b. SAS 118 requires auditors to disclaim an opinion on other information in an
other-matters paragraph in the auditor’s report on the financial statements.
c. SAS 118 requires auditors to report on other information.
d. SAS 118 requires auditors to withhold their reports on the financial
statements when uncorrected material misstatements of fact are identified.
COMPILATION AND REVIEW STANDARDS
Compilation Standards
Supplementary information. SSARS 19 addresses situations in which
compiled basic financial statements are accompanied by supplementary
information. It requires that:
The accountant clearly indicate the degree of responsibility, if any, taken
with respect to the supplementary information.
When the accountant has compiled both the basic financial statements
and supplementary information, the accountant’s report should refer to
the supplementary information, or a separate report on that information
should be issued.
If a separate report is issued, it should state that:
The other data accompanying the financial statements are presented
for purposes of additional analysis
The information has been compiled from information that is the
representation of management, without audit or review
The accountant does not express an opinion or provide any assurance
on such data.
Required supplementary information. SSARS 19 does not address situations in
which basic financial statements are accompanied by required supplementary
information. The AICPA has issued an interpretation to SSARS 19 (AR
Section 9080, Compilation of Financial Statements: Accounting and Review
Services Interpretations of Section 80) that addresses the accountant’s
responsibilities for this information.
This interpretation states that the accountant is not required to apply
procedures to any information presented for supplementary analysis purposes.
This includes required supplementary information. However, nothing
prohibits an accountant from compiling this information if engaged to do so.