Question

Dual dating refers to when the auditor _______.

A) Shows two dates on the same audit report
B) Shows two dates on two different audit reports
C) References last year's audit report concurrently with the current year report
D) Also includes the date that the internal control function issued their audit opinion.

Answer 1

Dual dating occurs when an auditor shows two dates on the same audit report to indicate a subsequent event that affects the report. The first date is for the original report, and the second reflects the event's date.

Step-by-step explanation:

Dual dating refers to when the auditor shows two dates on the same audit report. This typically occurs when a subsequent event happens after the original date of the auditor's report that materially affects the financial statements. The first date is the original date of the auditor's report, and the second date reflects the date of the subsequent event. This practice provides clarity on the timeline of events and communicates to users of the financial statements the periods for which the auditor is responsible.

One example of when dual dating may be used is if a company settles a lawsuit after the original date of the audit report, which significantly alters its financial position. By dual dating the audit report, the auditor indicates that they have considered the subsequent event only for the period after the original report date.