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

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Which statement regarding dual dating in audit reports is incorrect?

  1. If the predecessor's report is presented, management needs to provide a representation letter to the predecessor auditor.

  2. Dual dating may be used to indicate the dates for the audit of comparative financial statements.

  3. If the predecessor's report was qualified, the successor may issue an unmodified opinion on the current year's statements.

  4. If the predecessor's report is not presented, an other-matter paragraph should describe the situation.

The correct answer is: Dual dating may be used to indicate the dates for the audit of comparative financial statements.

The correct choice highlights a misunderstanding regarding the use of dual dating in audit reports, particularly as it relates to the auditing of comparative financial statements. Dual dating is a practice that allows auditors to acknowledge two different dates: one for the date of the completion of fieldwork and another for a specific event or transaction that occurred after the fieldwork was completed. This can be particularly relevant when subsequent events arise that may affect the financial statements, and it is necessary to indicate that the audit was conducted up to one date while considering events that occurred after that date. When it comes to comparative financial statements, which include financial information from multiple periods, dual dating is not used in the same way. Instead, the audit report typically reflects the date of completion of the audit for both periods to maintain clarity and consistency. Therefore, the incorrect statement suggests that dual dating could be applied to indicate separate audit dates for comparative financial statements, which does not align with standard auditing practice. The other statements are accurate reflections of auditing practices. They confirm appropriate requirements for management representation letters, the use of reporting for predecessor auditors, and the handling of qualified reports regarding current year's financial statements. Therefore, understanding the limitations and suitable applications of dual dating, especially in the context of comparative financial statements, is