If subsequent to the issuance of an audit report and financial statements facts comes to the auditor's attention that would have materially affected the audit report and the financial statements had those facts been known at the time,then the auditor should ask the client to inform regulatory agencies and users not to rely on the financial statements and to reissue those financial statements.

Question

Quizplus · Accepted Answer

According to the generally accepted auditing standards (GAAS), if the auditor becomes aware of facts that existed at the date of the audit report and may have affected the report, the auditor should take appropriate action. The appropriate action may include requesting management or the client to disclose the facts and their impact to regulatory agencies and users of the financial statements. If such facts are material and pervasive, it may be necessary to request the client to reissue the financial statements with appropriate disclosure. Therefore, the answer is true, and the auditor should ask the client to inform regulatory agencies and users not to rely on the financial statements and to reissue the financial statements.

If Subsequent to the Issuance of an Audit Report and Financial