Initial Engagement 9 / 10

Opening Balances

Get evidence that:

  1. No misstatements in them

  2. Prior period c/f correctly

    Or restated if necessary

  3. Accounting policies consistent

    If not then the comparative needs restating and disclosed

Prior Period Not Audited?

Procedures:

  1. Check post Y/E cash for confirming opening receivables / payables

  2. Do stock count and "roll back" to opening balance

  3. Get 3rd party confirmation on other assets and liabilities

Prior period - Different Auditor

Audit procedures:

  1. Review their working papers - for competence and independence

  2. Check FS & audit report for information relevant to opening balances

  3. If previous report modified - check it has been rectified now

Audit Report Possible Effects

Can't get enough evidence about opening balances?"Except for" or "Disclaimer"
Opening balances or disclosures incorrect"Except for" or "Adverse"