Question

The auditors' responsibility for information that accompanies audited financial statements varies with the nature of the information and the nature of the document.

a. Describe the auditors' responsibility regarding FASB-required supplementary information.
b. Describe the auditors' responsibility regarding other information in client-prepared documents.
c. Describe the auditors' responsibility regarding information accompanying financial statements in auditor-prepared documents.

Answer 1

The auditors' responsibility varies with the nature of the information and the document. For FASB-required supplementary information, auditors evaluate its consistency and compliance with GAAP. For other information in client-prepared documents, auditors consider material inconsistency or misstatements. In auditor-prepared documents, auditors ensure accuracy and completeness of information.

Step-by-step explanation:

a. The auditors' responsibility regarding FASB-required supplementary information is to perform procedures to evaluate whether the information is free from material misstatement in relation to the audited financial statements. They are required to read the information and consider whether it is consistent with the financial statements and comply with GAAP.

b. Regarding other information in client-prepared documents, the auditors' responsibility is to read the other information and consider whether it is materially inconsistent with the audited financial statements or contains any material misstatements.

c. In auditor-prepared documents, the auditors are responsible for ensuring the accuracy and completeness of the information accompanying the financial statements.