SAS No. 41 Reporting on Comparative Financial Statements 　

Status

Issued by Auditing Standards Committee in Taiwan on 30 November, 2004.

Summary

The auditor should obtain sufficient appropriate audit evidence that the comparative financial statements meet the requirements of the generally accepted accounting principles. This involves the auditor evaluating whether:

• Accounting policies of the prior period are consistent with those of the current period or whether appropriate adjustments and/or disclosures have been made; and
• Prior period figures presented agree with the amounts and other disclosures presented in the prior period or whether appropriate adjustments and disclosures have been made.

When the financial statements of the prior period have been audited by another auditor, the incoming auditor’s report should state that the prior period was audited by another auditor, the type of report issued by the predecessor auditor and if the report was modified, the reasons therefor, and the date of that report.　In addition, the incoming auditor should evaluate whether the comparative financial statements meet the above conditions and follow the guidance in SAS 21 Initial Engagements – Opening Balances.

When the financial statements of the prior period were not audited, the incoming auditor should state in the auditor’s report that the comparative financial statements are unaudited. In addition, the incoming auditor should nonetheless evaluate whether the comparative financial statements meet the above conditions and follow the guidance in SAS 21 Initial Engagements – Opening Balances. 　

If the auditor becomes aware of a possible material misstatement in the prior year figures when performing the current period audit, the auditor performs such additional audit procedures as are appropriate in the circumstances.

When the comparatives are presented as comparative financial statements, the auditor should issue a report in which the comparatives are specifically identified because the audit opinion is expressed individually on the financial statements of each period presented.

When reporting on the prior period financial statements in connection with the current year’s audit, if the opinion on such prior period financial statements is different from the opinion previously expressed, the auditor should disclose the substantive reasons for the different opinion in an emphasis of matter paragraph.

Effective date

This Statement is effective from 1 January, 2005.