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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