After an Auditor Has Issued an Audit Report on a Nonpublic

question 8

Multiple Choice

After an auditor has issued an audit report on a nonpublic entity, there is no obligation to make any further audit tests or inquiries with respect to the audited financial statements covered by that report unless

• A) New information comes to the auditor's attention concerning an event that occurred prior to the date of the auditor's report that may have affected the auditor's report.
• B) Material adverse events occur after the date of the auditor's report.
• C) Final determination or resolution was made on matters that had resulted in a qualification in the auditor's report.
• D) Final determination or resolution was made of a contingency that had been disclosed in the financial statements and no liability arose from the resolution.

---

Definitions:

Exclusive Agency Contract

A contractual agreement where one party grants another party the exclusive rights to act on their behalf, typically used in real estate and talent management.

Implied Authority

This refers to the power of an agent to perform acts which are reasonably necessary to accomplish the purpose of an organization’s agency agreement, even if not explicitly granted.

Duty of Accounting

The obligation of a party (usually a fiduciary) to keep accurate records and report financial activity to relevant stakeholders or authorities.

Agent Owe

The duty or obligation an agent has to act in the best interest of the principal, including loyalty, care, and full disclosure.