Question

What is an auditor's responsibility for supplementary information, such as segment information, that is outside the basic financial statements, but required by the FASB?

a. The auditor has no responsibility for required supplementary information as long as it is outside the basic financial statements.
b. The auditor's only responsibility for required supplementary information is to assist in preparing the supplementary information.
c. The auditor should apply certain limited procedures to the required supplementary information and report deficiencies in or omissions of, such information.
d. The auditor should apply tests of details of transactions and balances to the required supplementary information and report any material misstatements in such information.

Answer 1

The auditor's responsibility for supplementary information, such as segment information, that is outside the basic financial statements but required by the FASB is to apply certain limited procedures and report deficiencies or omissions in such information.

Step-by-step explanation:

The correct answer is c. The auditor should apply certain limited procedures to the required supplementary information and report deficiencies in or omissions of, such information.

When it comes to supplementary information, such as segment information, that is required by the Financial Accounting Standards Board (FASB), the auditor has a responsibility to apply certain limited procedures. These procedures involve reviewing the supplementary information to identify any deficiencies or omissions in the information. If the auditor finds any deficiencies or omissions, they are required to report them.

For example, if a company's basic financial statements include information about its overall financial performance, but the FASB requires additional segment information, such as performance data for each geographical region or business segment, the auditor would need to review this supplementary information to ensure it is complete, accurate, and in compliance with the FASB's requirements.