Which of the following is a requirement for an auditor to issue a report on the application of requirements of an applicable financial reporting framework (a 'second opinion' engagement)?

Answer options:

The reporting accountant must audit the financial statements.

The reporting accountant must consult with the continuing accountant (incumbent auditor).

The report must be distributed to the general public.

The reporting accountant must be independent of the entity and the continuing accountant.

How to approach this question

AU-C 915 Reports on Application of Requirements. Key safeguard: Talk to the current auditor.

Full Answer

B.The reporting accountant must consult with the continuing accountant (incumbent auditor).✓ Correct

To prevent 'opinion shopping' (where a client searches for an auditor who agrees with their aggressive accounting), AU-C 915 requires the reporting accountant to consult with the continuing accountant to ascertain all the available facts relevant to forming a professional judgment.

Common mistakes

Thinking you can give a second opinion in isolation.

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