Concept explainers
Provide the comment on the given statement.
Explanation of Solution
Audit report:
The audit report is a written opinion of the auditor on the fair representation of the financial statements of the company. The audit report is prepared in a specific manner as mandated by the applicable financial reporting framework. It examines whether the company has followed the GAAP guidelines.
Comparative financial statements:
Financial statements usually represented through the comparative form for the current year as well as one or more previous years. Such financial statements are prepared based on the general purpose financial reporting framework.
Comment on the given statement:
The given statement is not correct. The comparative financial statements imply the comparison between the current year and the previous year’s financial statements of the same company. Thus, it cannot be said that an audit report on comparative financial statements ordinarily compares current year financial statements of two or more companies with one another.
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Chapter 17 Solutions
Principles Of Auditing & Other Assurance Services
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