Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

How does an auditor make representations when issuing an unmodified audit opinion on comparative financial statements?

1. Explicitly for consistency, explicitly for evidence.

2. Implicitly for consistency, explicitly for evidence.

3. Explicitly for both consistency and evidence.

4. Implicitly for both consistency and evidence.

The correct answer is: Explicitly for both consistency and evidence.

When an auditor issues an unmodified audit opinion on comparative financial statements, they make representations explicitly. The auditor explicitly addresses both the consistency of the financial statements across periods and the evidence obtained during the audit process. In terms of consistency, the auditor ensures that the financial statements have been prepared using the same accounting policies across the comparative periods, which is crucial for allowing users to make valid comparisons. This consistency is explicitly stated in the auditor's report. Regarding evidence, the auditor collects sufficient and appropriate audit evidence to provide a basis for their opinion. The explicit representation about the evidence confirms that the auditor has thoroughly evaluated the financial statements and the underlying data. This level of clarity helps users of the financial statements to understand that the auditor has performed due diligence in their review. In summary, the correct choice reflects the auditor's clear and direct approach concerning both the consistency of the financial statements and the sufficiency of the evidence accumulated during the audit process.