Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

If an auditor's report is dated after discovering a subsequent event, what does it indicate about the responsibilities assumed by the auditor?

1. The auditor is responsible for all events before the original report date.

2. The auditor must dual-date the report to limit their obligations.

3. The auditor is only responsible for events that occurred up to the new report date.

4. The auditor remains responsible only for the reported financials as of the initial report date.

The correct answer is: The auditor is only responsible for events that occurred up to the new report date.

When an auditor's report is dated after the discovery of a subsequent event, it indicates that the auditor has a responsibility to assess and reflect on any significant events that occurred after the original report date but before the issuance of the revised report. By updating the report date, the auditor acknowledges that new information is relevant to the financial statements and users should be made aware of these developments. This approach ensures that the financial statements are presented fairly and in accordance with the applicable reporting framework, taking into account any material events that could impact the understanding of the financial position and results of operations. Thus, the auditor's responsibilities evolve to include consideration of these subsequent events, and it allows them to communicate any significant changes or adjustments required by the event's nature. While the auditor is responsible for events occurring up to the new report date, they may not be responsible for all periods preceding the original report date if no issues have been identified that would necessitate such coverage. This ensures that the report remains relevant and reflects the most accurate financial condition of the entity. In contrast, other options either misrepresent the scope of the auditor's responsibility following the discovery of subsequent events or inaccurately suggest limitations on the auditor's obligations. This highlights the significance of the timing of events relative to the