Five months after issuing an unqualified audit opinionand an unqualified opinion on internal controls for the audit of the year ended December31, 2013, for a large publicly traded client, the client and the auditor become aware of amaterial misstatement in sales revenue for the year in question, which was the resultof a material weakness in internal controls. Is this a subsequent event or a subsequentdiscovery of facts? What are the auditor’s responsibilities related to the audit opinion andthe opinion on internal controls?
Five months after issuing an unqualified audit opinionand an unqualified opinion on internal controls for the audit of the year ended December31, 2013, for a large publicly traded client, the client and the auditor become aware of amaterial misstatement in sales revenue for the year in question, which was the resultof a material weakness in internal controls. Is this a subsequent event or a subsequentdiscovery of facts? What are the auditor’s responsibilities related to the audit opinion andthe opinion on internal controls?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Five months after issuing an unqualified audit opinion
and an unqualified opinion on internal controls for the audit of the year ended December
31, 2013, for a large publicly traded client, the client and the auditor become aware of a
material misstatement in sales revenue for the year in question, which was the result
of a material weakness in internal controls. Is this a subsequent event or a subsequent
discovery of facts? What are the auditor’s responsibilities related to the audit opinion and
the opinion on internal controls?
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