Auditing and Attestation - Certified Public Accountant (CPA) Practice Exam 2026 - Free CPA Practice Questions and Study Guide

The comparative financial statements are essential for an auditor to evaluate the consistency of the application of accounting principles across different reporting periods. These statements present the financial performance of an organization for multiple periods side by side, allowing the auditor to analyze trends, identify any changes in accounting policies, and assess how consistently those principles have been applied. This comparison helps auditors ensure that any significant variations or adjustments are properly disclosed and justified, providing a clearer picture of the company's financial health over time.

The management representation letter primarily serves to document management's assertions regarding the financial statements, while the internal control report focuses on assessing the effectiveness of the company's internal controls. The opinion letter expresses the auditor's opinion on the financial statements and may reference the consistency of accounting principles, but it is the comparative financial statements that provide the concrete data necessary for such an assessment.