Management and practitioners sometimes find errors (also referred to as misstatements) in previously released financial statements. Such errors trigger implications for audits, reviews, and compilations. In this report, we discuss the relevant professional standards and practitioner responsibilities. See the CPEA’s companion report, Financial Statement Errors: Accounting Implications, issued simultaneously with this report.
When practitioners are auditing financial statements and a material error in previously issued financial statements is discovered, the applicable audit engagement literature is in AU-C 560, Subsequent