Question $18($Mandatory$)(8$ points$)$

Assume that shortly after the balance sheet date and before the audit report date, auditors learned that the company has settled a lawsuit against it that was litigated for over a year. Which of the following actions are auditors likely to request from the company's management?

Question $18$ options:

a$.$Update the disclosure that was already likely in the financial statements

b$.$Update the financial statements to reflect the amount of the settlement payable

c$.$Recognize the settlement payable in the financial statements of the year when the lawsuit was settled, since the event occurred after the Balance Sheet date

d$.$Both A & B