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:

Pseudostratified Columnar

A type of epithelial tissue with cells of varying heights that appear stratified but each cell touches the basal lamina.

Stratified Squamous

A type of epithelial tissue composed of several layers of flat cells designed to protect underlying tissues in areas subject to abrasion and friction.

Bronchi

The major air passages of the lungs that diverge from the windpipe.

Mesenchymal Cells

Stem cells that can differentiate into various types of cells including those of the bone, cartilage, muscle, and fat tissue.