4. XYZ company's fiscal year 2021 covers the period from 01/01/2021 to 12/31/2021. The audit report date for the 2021 fiscal year is 03/07/2022, and the 10-K disclosure date is 03/09/2022. On 02/03/2022, one of XYZ's major clients, ABC company experienced an unexpected fire in its warehouse. As a result, ABC is not able to pay for a note payable to XYZ on 03/01/2022, which was the scheduled payment date. Based on the description above, XYZ should a. Adjust financial statements b. Disclose the events/activities c. Issue a restatement d. None of above

4. XYZ company's fiscal year 2021 covers the period from 01/01/2021 to 12/31/2021. The audit report date for the 2021 fiscal year is 03/07/2022, and the 10-K disclosure date is 03/09/2022. On 02/03/2022, one of XYZ's major clients, ABC company experienced an unexpected fire in its warehouse. As a result, ABC is not able to pay for a note payable to XYZ on 03/01/2022, which was the scheduled payment date. Based on the description above, XYZ should a. Adjust financial statements b. Disclose the events/activities c. Issue a restatement d. None of above

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter15: Audit Reports For Financial Statement Audits

Section: Chapter Questions

Problem 19RQSC

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Bb.
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Solve the following question.
Ross & Ross, CPAS, performed an audit of the financial statements of Ruby Manufacturing for the year ended December 31, 20X7 and issued their report on March 2, 20X8. As of April 1, 20X8, due to various circumstances, Ross & Ross was no longer independent from Ruby Manufacturing and did not perform any further audits of the company's financial statements. On June 15, 20X8, Ross & Ross was asked to re-sign the audited financial statements of Ruby Manufacturing for the year ended December 31, 20x7. Which of the following is TRUE regarding this situation? Since Ross & Ross, CPAS are no longer independent of Ruby Manufacturing, they may not re-sign the audit report. If post audit work was performed after March 2, 20X8, Ross & Ross, CPAs would not be able to re-sign the report. If post audit work was performed from April 1, 20X8 until June 15, 20X8, Ross & Ross, CPAs would not be able to re-sign the report. Since Ross & Ross, CPAS was independent at the time the report was issued, there is…
11,000 8,690, and 0 are all incorrect answers. Thanks!