On February 9,Brown,CPA,expressed an unmodified (unqualified)opinion on the financial statements of Web Co.On October 9,during a peer review of Brown's practice,the reviewer informed Brown that engagement personnel failed to perform a search for subsequent events for the Web engagement.Brown should first:
A)Request Web's permission to perform substantive procedures that would provide a satisfactory basis for the opinion.
B)Inquire of Web whether there are persons currently relying,or likely to rely,on the financial statements.
C)Take no additional action because subsequent events have no effect on the financial statements that were reported on.
D)Assess the importance of the omitted procedures to Brown's present ability to support the opinion.

Question

Quizplus · Accepted Answer

Option A is not the correct choice because Brown cannot perform substantive procedures after the report has been issued without withdrawing the original opinion and issuing a new one.

Option B is not the correct choice because it does not address the issue of the omitted subsequent event procedures.

Option C is not the correct choice because subsequent events may have an impact on the financial statements that were reported on, and the lack of a search for subsequent events is a departure from GAAS.

Option D is the best choice because it addresses the issue of assessing the importance of the omitted procedure and what action, if any, needs to be taken to support the original opinion. Brown should determine whether the omitted procedure would have identified any subsequent events that should have been disclosed in the financial statements or whether any subsequent event disclosures would have affected the original opinion. Based on this assessment, Brown should determine what action, if any, needs to be taken to support the original opinion.

On February 9,Brown,CPA,expressed an Unmodified (Unqualified)opinion on the Financial Statements