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CGOV.10:5.1 - An audit of statements and a new investment

A constructed corporation has an auditor’s unmodified opinion on its annual financial statements under the specified reporting framework. The board is considering a new service investment. The proposal attaches the audit report and says the investment is assured.

The report’s subject is the historical financial statements. It can contribute relevant information about the stated financial position; it does not examine the service’s forecast demand or decide the investment. The board retains that usable input and returns the forecast question to its responsible practice.

The supplied case has no duty to obtain a second audit for this investment. If an adequate demand analysis already exists, use it. If it does not, select a feasible further inquiry or a narrower decision according to what the uncertainty changes. The existing audit opinion neither disappears nor grows to cover the forecast.