Wiley Practitioner's Guide to GAAS 2022

18AU-C 510 Opening Balances—Initial Audit Engagements, Including Reaudit Engagements

• Scope
• Definitions of Terms
• Objective of AU-C Section 510
• Requirements
  • Material Misstatement in Prior-Year Financial Statements
  • Audit Conclusions and Reporting
• AU-C 510 Illustrations

SCOPE

AU-C 510 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 510.05. For definitions related to this standard, see Appendix A, “Definitions of Terms”: Initial audit engagement, Opening balances, Predecessor auditor, Reaudit.

OBJECTIVE OF AU-C SECTION 510

The objective of the auditor, in conducting an initial audit engagement, including a reaudit engagement, is to obtain sufficient appropriate audit evidence regarding opening balances about whether

1. opening balances contain misstatements that materially affect the current period's financial statements and
2. appropriate accounting policies reflected in the opening balances have been consistently applied in the current period's financial statements or changes thereto are appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.

   (AU-C Section 510.04)