Wiley Practitioner's Guide to GAAS 2018, 2nd Edition

AU-C 510 Opening Balances—Initial Audit Engagements, Including Reaudit Engagements

AU-C Original Pronouncement

Source

Statement on Auditing Standards (SAS) 122.

Applicability

This section relates to the auditor's responsibilities for the opening balance in an initial audit engagement, including a reaudit. The section does not apply to the predecessor auditor if the most recent audited financial statements are more than one year prior to the beginning of the earliest period to be audited by the successor auditor. (AU-C 510.01-.02)

Definitions of Terms

Source: AU-C Section 510.05

1. Initial audit engagement. An engagement in which either (1) the financial statements for the prior period were not audited, or (2) the financial statements for the prior period were audited by a predecessor auditor.
2. Opening balances. Those account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and reflect the effects of transactions and events of prior periods and accounting policies applied in the prior period. Opening balances also include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.
3. Predecessor auditor. The auditor from a different audit firm who has reported on the most recent audited financial statements or was engaged to perform but did not complete an audit of the financial statements.
4. Reaudit. An initial audit engagement to audit financial ...