ExpertHard1 markMultiple Choice
CPA · Question 77 · Area III: SOC Engagements
If an auditor discovers a 'Subsequent Event' (after the period end but before the report date) that significantly affects the system's security, what should they do?
If an auditor discovers a 'Subsequent Event' (after the period end but before the report date) that significantly affects the system's security, what should they do?
Answer options:
A.
Ignore it because it happened after the period.
B.
Extend the audit period to include the event.
C.
Disclose the event in the report if it is material.
D.
Withdraw from the engagement.
How to approach this question
Standard audit standard for subsequent events: Disclose.
Full Answer
C.Disclose the event in the report if it is material.✓ Correct
Subsequent events that are of such a nature that their non-disclosure would affect the user's ability to rely on the report must be disclosed, typically in a separate section or note.
Common mistakes
Ignoring it because of the date cutoff.
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