Audit Procedures: Extending Audit Conclusions from Interim Date to Balance Sheet Date

What additional work must be performed to extend the audit conclusions from the interim date to the balance sheet date?

a. Substantive procedures for the period between the interim date and the balance sheet date.
b. Tests of controls for the period between the beginning of the fiscal year and the interim date.
c. Analytical comparison of the current-year interim balance with the prior-year interim balance.
d. Tests of controls for the period between the interim date and the balance sheet date.

Answer:

To extend the audit conclusions from the interim date to the balance sheet date, the auditor needs to perform substantive procedures for the period between the interim date and the balance sheet date. If relevant controls' effectiveness hasn't been established, additional tests of controls would also be required.

Explanation:

The additional work that must be performed to extend the audit conclusions from the interim date to the balance sheet date is performing substantive procedures for the period between the interim date and the balance sheet date. Substantive procedures refer to a type of audit procedure that auditors perform to detect material misstatements in the financial statements and usually involve a detailed testing of transactions, balances, and procedures. In this case, after the interim audit, the auditor needs to continue performing these procedures to ensure the same level of assurance as of the balance sheet date.

In addition, if the auditor hasn't obtained evidence about the operating effectiveness of relevant controls up to the interim date, then additional work would be required to perform tests of controls. This could potentially mean performing tests of controls for both time periods: the beginning of the fiscal year to the interim date, and the interim date to the balance sheet date.