An auditor is performing a 'review' of the Management's Discussion and Analysis (MD&A) of a nonissuer. Which of the following is a requirement for this engagement?

Answer options:

The auditor must have audited the financial statements for the latest period to which the MD&A relates.

The auditor provides an opinion on the MD&A.

The engagement is performed under SSARS.

The auditor need not be independent.

How to approach this question

MD&A Engagement = SSAE. Prerequisite: You must be the auditor of the financials. You can't review MD&A in a vacuum.

Full Answer

A.The auditor must have audited the financial statements for the latest period to which the MD&A relates.✓ Correct

Under SSAE (AT-C), a practitioner may perform an examination or review of MD&A only if they have audited the financial statements for the most recent period to which the MD&A relates.

Common mistakes

Thinking MD&A is SSARS; forgetting the audit prerequisite.

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