Following the Audit Report Release Date, Auditors Became Aware of Facts

question 30

Multiple Choice

Following the audit report release date, auditors became aware of facts existing at the report date that would have affected the reports had auditors then been aware of such facts. What is the most appropriate initial course of action that auditors should take?

• A)Determine whether there are persons relying or likely to rely on the financial statements who would attach importance to the information.
• B)Request that management disclose the newly-discovered information by issuing revised financial statements.
• C)Issue revised pro forma financial statements taking into consideration the newly discovered information.
• D)Give public notice that auditors are no longer associated with financial statements.

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Definitions:

Phenols

Organic compounds consisting of a hydroxyl group (-OH) attached directly to an aromatic hydrocarbon group.

Acidity

Refers to the measure of a substance's ability to donate a proton or accept an electron pair in chemical reactions.

Acid-Base Reaction

A chemical reaction involving the transfer of a proton (H⁺) from an acid to a base.

Pka Values

Numerical values that measure the acidity of protons in molecules based on their ability to be donated in an aqueous solution.