The American Institute of CPAs has released a technical practice aid about what auditors should do about asking for a written management representation regarding prior periods that were audited by a previous auditing firm.
AICPA Technical Question and Answer (TPA) 8900.11, “Management Representations Regarding Prior Periods Presented That Were Audited by Predecessor Auditor,” provides nonauthoritative guidance when the prior period financial statements were audited by a predecessor auditor and the predecessor auditor’s report on the prior period’s financial statements has not been reissued.
The document advises that the auditor is not required to obtain a representation letter covering the prior period financial statements because the auditor is not opining on the prior year when making reference to the prior period that was audited by a predecessor auditor. The technical practice aid also discusses when additional representations may be necessary in the current year’s letter.
For other recent AICPA technical questions and answers, click here.
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