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

What factor is considered most important upon discovering facts that existed at the audit report date?

1. The auditor's professional judgment.

2. The client's willingness to revise financial statements.

3. The impact of the findings on future audits.

4. The potential impact on financial statements over several years.

The correct answer is: The client's willingness to revise financial statements.

The most important factor upon discovering facts that existed at the audit report date revolves around the auditor's professional judgment in evaluating the implications of those findings. When new information comes to light that could affect the financial statements, auditors must assess how this information alters their understanding of the entity’s finances as reported up to the date of the audit report. Professional judgment involves analyzing the materiality of the discovered facts, determining their relevance, and assessing whether they might lead to a significant misstatement in the financial statements. This assessment guides the auditor on whether the financial statements are still accurate and whether a revision is necessary. In this scenario, the client’s willingness to revise the financial statements, while relevant, does not take precedence over the auditor's professional judgment. The auditor must ensure that the financial statements present a true and fair view based on all available information, regardless of the client's readiness to alter their statements. Hence, while all options present important considerations, the quality of the auditor’s professional judgment remains the cornerstone of addressing discovered facts at the audit report date.