Gates Inc. has its reviewed interim financial information included with the audi

Question

Gates Inc. has its reviewed interim financial information included with the audited financial statement. However, after the review the auditor believes that the interim financial information is not prepared in accordance with an applicable financial reporting framework. The review report which references the departure is not presented with the interim financial information that accompanies the audited financial statements. The engagement partner requests your assistance to research as to the impact on the report of the audited financial statements.

Explanation / Answer

Interim Financial Reports:

Interim financial statements are financial statements that cover a period of less than one year. The concept is most commonly applied to publicly-held companies, which must issue these statements at quarterly intervals. These entities issue three sets of interim statements per year, which are for the first, second, and third quarters. The final reporting period of the year is encompassed by the year-end financial statements, and so is not considered to be associated with interim financial statements.

So if the Interim Financial reports are not correctly reoprted or they are matching with the audited reports, then the problem starts to the internal management in answering the questions of outside auditors.

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