AU-C 560 and AS 2905 state the first step when responding to subsequently discovered facts is to_______.
A)discuss the matter with the appropriate level of management and, if appropriate, those charged with governance
B)discuss the matter with the appropriate level of management rather than those charged with governance
C)issue a disclaimer of opinion, to avoid liability
D)immediately notify the board of directors, and request the internal audit function investigate accordingly

Question

Quizplus · Accepted Answer

Both AU-C 560 and AS 2905 state that the first step when responding to subsequently discovered facts is to discuss the matter with the appropriate level of management and, if appropriate, those charged with governance. This allows for timely communication and a coordinated response to the issue. Option B is incorrect because it does not involve informing those charged with governance, which is an important step in the process. Option C is incorrect because issuing a disclaimer of opinion is not an appropriate response to subsequently discovered facts. Option D is incorrect because notifying the board of directors and requesting an investigation by the internal audit function should only be done after discussing the matter with the appropriate level of management.

AU-C 560 and AS 2905 State the First Step When