Shamiro, I am also having problem to understand the meaning of "update".  For example in comparative current period reviewed and prior period compiled "Service upgrade".  Becker says:

When the continuing accountant perform a hgher level of service in the current period, the report on the piror period(s) should be updated and issued as the last paragraph of the current period's report. 

Can someone give me example?

Thanks.

I also don't understand why do we need to update prior period report, for what purpose?

Hope someone can help on this.  Thanks!!

One of the main components of audits is consistency which relates to comparability.  If you have financial statements that are supposed to be in comparative form, they aren't consistent if they were rendered a different opinion or no opinion in the prior year.  You can't compare a compilation with an audit...they are not the same.  It is like comparing apples and oranges.  That is why you want to update the audit report.

Any time you have a higher service (audit vs. a compilation or review) you want to use the higher service because it is better. 

Floridagirl,  Thank you very much !!