Refer to the application case and analysis at the end of the chapter Assume that, instead of withdrawing from the engagement, the auditors in this case had issued a clean audit report on all the companies in the case for the 20X9 year end They used the appraisals and other representations from the ...

Subsequent discovery of facts and audit reporting The scenario in this case suggests the auditors have become aware of facts subsequent to the issue o ...

Refer to the application case and analysis at the end of the chapter. Assume that, instead of

Question:

Refer to the application case and analysis at the end of the chapter. Assume that, instead of withdrawing from the engagement, the auditors in this case had issued a clean on all the companies in the case for the 20X9 year-end. They used the appraisals and other representations from the Blues brothers as evidence that the mining properties were correctly valued and the were fairly presented. One month after the audited were issued to shareholders, the auditors contact the companies’ accountant about their unpaid fees and learn that the companies have run out of cash and ceased operations. It is suspected that the Blues brothers took all the cash that the bank had lent to the companies and fled the country.

Required:
What are the auditors’ responsibilities in this situation?

Audit Report
The audit report is issued by a certified public accountant who is appointed by the shareholders to provide assurance upon the truth and fairness of the financial statements prepared by the managers of the company. Audit report contains the... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...