In the report of independent reRegistered Public accounting firm, the auditor audits each of 3 years of income, cash flow, and changes in equity. My assumption was that they only audit for 1 year. Am i missing something?
I haven't studied audit since last summer so hopefully someone else chimes in but I think it's because public SEC filers are required to present 3 years (2018, 19, 20) of financial statements so maybe that's why they say 3 years. It's an annual audit engagement but they audit the 3 most recent years I suppose.
Your logic make sense, the auditors already have audited the previous years but they just have to present them along with the current one. As far as balance sheets, it make sense to audit both years since they are permanent accounts and require analytical procedures Thanks man!