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:

Flail

A tool consisting of a handle attached to a striking head by a flexible joint, used historically for threshing grain or in a weapon context.

Somnambulism

Somnambulism, also known as sleepwalking, is a disorder that involves walking or performing other activities while appearing to be asleep.

Wandering

An aimless or undirected movement or thought pattern.

Asleep

A state of rest where consciousness is suspended, and the body undergoes recovery and growth processes.