auditor should describe the effect of this subsequently discovered information
Statement 1: After an audit report containing an unqualified opinion on a non-public client's financial statements was issued, the client decided to sell the shares of a subsidiary that accounts for 30% of its revenue and 25% of its net income. The auditor should take no action because the auditor has no obligation to make any further inquiries,
Statement 2: After an audit report containing an unqualified opinion on a non-public client's financial statements was issued, the client decided to sell the shares of a subsidiary that accounts for 30% of its revenue and 25% of its net income. The auditor should notify the entity that the auditor's report may no longer be associated with the financial statements.
Statement 3: After an audit report containing an unqualified opinion on a non-public client's financial statements was issued, the client decided to sell the shares of a subsidiary that accounts for 30% of its revenue and 25% of its net income. The auditor should describe the effect of this subsequently discovered information in a communication with persons known to be relying on the financial statements.
A. Only one statement is correct
B. Only two statements are correct
C. All statements are correct
D. All statements are incorrect
Step by step
Solved in 3 steps
