Assume That T

question 8

Multiple Choice

Assume that T.Rory is auditing the financial statements of Augusta,Inc.Rory completes fieldwork on February 25 and issues the report (along with Augusta's financial statements) on March 1.On March 3,a hurricane destroys a warehouse that contains a significant amount of uninsured inventory.Which of the following best describes Rory's responsibility with respect to the effects of this hurricane on Augusta's financial statements?

• A) Because the inventory was included in the financial statements audited by Rory, he is required to perform additional procedures and reissue his report on the revised financial statements.
• B) Because the hurricane occurred after the date of Rory's report, he has no responsibility to perform additional procedures or reissue his report.
• C) Because the hurricane occurred prior to the next fiscal quarter, Rory is required to perform additional procedures and reissue his report on the revised financial statements.
• D) Because the hurricane occurred after the release of the financial statements and Rory's report, he has no responsibility to perform additional procedures or reissue his report.

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Definitions:

Tax Benefits

Financial advantages conferred by tax laws to encourage certain transactions or activities, such as deductions, exemptions, or credits.

Hybrid Cars

Vehicles that use a combination of internal combustion engines and electric motors to increase fuel efficiency and reduce emissions.

Pollution

The introduction of harmful substances or products into the environment, impacting air, water, and land negatively.

LEED

Leadership in Energy and Environmental Design, a widely used green building certification program that recognizes best-in-class building strategies and practices.