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An auditor is asked to reissue the report. The auditor is aware that an event subsequent to the date of the report has occurred that requires disclosure in, but not adjustment of, the statements. The auditor should
A. Have the client provide a note captioned as follows: Event (Unaudited) Subsequent to the
Date of the Report of the Independent Auditor.
B. Reissue the report as of the date of the subsequent event if no additional audit work is performed.
C. Disregard the subsequent event.
D. Dual date the report if no further audit work is performed.
An auditor is reporting on comparative financial statements for 3 years. Which of the following statements is correct regarding written representations from management?
A. The representation letter needs to address the prior-year’s financial statements not covered in the report.
B. The representation letter needs to address only the most current year covered in the report.
C. The representation letter needs to address only the 2 most recent years covered in the report.
D. The representation letter needs to address all of the years being covered in the report.
An auditor’s client has failed to comply with environmental regulations. If the client fails to take necessary remedial action, the auditor
A. Should change his or her preliminary judgment about the risks of material misstatement.
B. Should express an adverse opinion.
C. May reconsider the reliability of the response to the letter of inquiry to the client’s legal counsel.
D. May need to reassess management’s representations.
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