Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

When audited financial statements appear in a document with other information, what should an auditor do?

1. A. Add an other-matter paragraph without changing the opinion

2. B. Perform substantive procedures corroborating the other information

3. C. Read the other information for consistency with the audited statements

4. D. Perform inquiry and analytical procedures on the other information

The correct answer is: C. Read the other information for consistency with the audited statements

When audited financial statements are presented in a document containing additional information, the auditor's role is to ensure that there is consistency between the audited financial statements and the other information. By reading the other information, the auditor can identify any material discrepancies or inconsistencies between it and the financial statements. This step is crucial because it helps maintain the credibility of the audited financial statements and informs stakeholders about the integrity of the entire document. If the other information contradicts the financial statements, the auditor may need to address those discrepancies and ensure proper disclosures or explanations are made, such as through an emphasis of matter or other-matter paragraph, depending on the situation. However, simply reading and assessing for consistency is the primary and most straightforward responsibility assigned to the auditor in this scenario. This option emphasizes the importance of maintaining the reliability of the financial statements and the overall accuracy of the financial reporting, as clear and consistent communication is key to effective auditing. Other choices, such as performing substantive procedures or analytical procedures, are more intensive actions that are not required solely due to the presence of other information.