A Major Customer of an Audit Client Suffers a Fire

question 7

Multiple Choice

A major customer of an audit client suffers a fire just prior to completion of year-end fieldwork. The audit client believes that this event could have a significant direct effect on the financial report. The auditor should:

• A) advise management to disclose the event in notes to the financial report.
• B) disclose the event in the auditor's report.
• C) withhold submission of the auditor's report until the extent of the direct effect on the financial report is known.
• D) advise management to adjust the financial report.

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Definitions:

Genetic Factors

Pertains to the hereditary contributions to an individual’s physical and behavioral traits, passed from parents to offspring through genes.

Bipolar Disorder

A mental disorder characterized by periods of depression and periods of elevated mood.

Depressive Disorders

A range of conditions characterized by persistent feelings of sadness, hopelessness, and other emotional disturbances that interfere with daily functioning.

Information

Data, facts, or details provided or learned about something or someone.