After the balance sheet date but prior to the last day of fieldwork the client decides to acquire PaperWeight Company to obtain a significant increase in revenues.The auditor would probably give a report that includes the statement: "except for the acquisition of PaperWeight Company...".

Question

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The acquisition of PaperWeight Company is a subsequent event that does not affect the financial statements as of the balance sheet date. The auditor would not modify the report with an "except for" statement but may require disclosure in the notes to the financial statements.

After the Balance Sheet Date but Prior to the Last