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:

Ignore it because it happened after the period.

Extend the audit period to include the event.

Disclose the event in the report if it is material.

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

Disclose the event in the report if it is material.

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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