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QUESTION 8 An auditors report contains the following sentences:We did not audit the financial statements of B Company, a con

Principles of auditing Ch3

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Answer #1

Question 8

Answer : Divide Responsibility

Explanation : It maybe impracticable for principal auditor to review the other auditor's work and if the component audited by other auditor is material, then the auditor should clearly state the division of responsibility by indicating the extent to which information audited by other auditor has been relied upon to form the opinion. This is to divide the responsibility between the auditors.

Question 9

Answer. : Modify the introductory and opinion paragraph of the report

Explanation : The auditor may provide the details of subsidiary and the other auditor in the introductory paragraph and a statement to the effect that other auditor is responsible for the audit of subsidiary in the opinion paragraph.

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