If management revises the financial statements due to subsequently discovered facts, auditors should_______.
A)perform no further audit procedures on the changes made by management
B)perform audit procedures on the changes made by management
C)always issue a qualified opinion with respect to the changes
D)issue a scope limitation, even if they are able to audit the changes

Question

Quizplus · Accepted Answer

If management revises the financial statements due to subsequently discovered facts, auditors should perform audit procedures on the changes made by management to ensure the changes are appropriate and the financial statements are accurate. This may involve additional testing or reevaluating previous audit work. Failure to do so could result in a failure to detect material misstatements or fraud, which could harm the auditor's reputation and potentially result in legal or regulatory consequences. Therefore, auditors should exercise due care and professional skepticism and thoroughly examine any changes made by management.

If Management Revises the Financial Statements Due to Subsequently Discovered