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Limited-Use Financial Statements Should Not Limit Audit Work

The situation

The 2004 financial statements of ABC Mortgage Corporation, a provincially regulated mortgage broker, came under the scrutiny of its provincial regulator late that same year. As the result of a subsequent investigation, ABC had to make various changes to its financial statements, and its auditors were reported to the PCEC.

ABC hired John* and his mid-sized firm as its new auditors for 2005. The 2005 audited financial statements were issued and filed with the regulator in due course.

While investigating the work done by ABC's previous auditors, the PCEC reviewed the company's 2005 financial statements and found enough cause for concern about disclosure that it decided to ...

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