Accounting · Auditor Responsibilities for Subsequent Events
The auditor's report was signed on the planned date, and an unmodified opinion was issued. It is now 20 July 20X5. The annual general meeting is to take place on 21 August 20X5. The Environmental Agency has issued a report stating that Marine Co is in breach of environmental legislation and a fine of $900,000 will now be levied on the company. The amount is material to the financial statements. Which of the following audit procedures should NOT be performed in respect of this fine?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1If the directors decide not to amend the disclosure in the financial statements, speak at the annual general meeting to inform the members of the facts
- 2If the directors amend the disclosure in the financial statements, add an Emphasis of Matter paragraph in the existing auditor's report✓
- 3Determine whether the financial statements need amendment
- 4Discuss the matter with the directors to determine their course of action
Correct answer
If the directors amend the disclosure in the financial statements, add an Emphasis of Matter paragraph in the existing auditor's report
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