Final answer:
Immaterial misstatements from prior years should be considered in the evaluation of audit findings in the current year. They are not typically required to be disclosed in the current-year financial statements or retested unless there are changes in controls. These misstatements should remain in the prior-year summary for informational purposes.
Step-by-step explanation:
Misstatements that were immaterial in prior years are often considered as aggregate misstatements when evaluating audit findings in the current year. This is to assess whether these immaterial misstatements, when accumulated, might become material, which could impact the fairness of the current year’s financial statements. The auditor must exercise professional judgment in determining the significance of these misstatements in relation to the audit findings of the current year. It is not typically necessary to disclose immaterial misstatements in the current year financial statements, nor is it a requirement to retest them during current-year tests of controls unless there is a reason to believe that the controls have changed. Removing immaterial misstatements from the prior-year summary is not an appropriate action as even immaterial misstatements can provide useful information about the pattern and nature of misstatements.