Facts Discovered After the Date the FinaFacts Discovered After the Date the Financial Report has been Issued

Facts Discovered After the Date the Financial Report has been Issued

21 After the financial report has been issued, the auditor has no obligation to make any enquiry regarding such a financial report.

22 When, after the financial report has been issued, the auditor becomes aware of a fact which existed at the date of the auditor’s report and which, if known at that date, may have caused the auditor to modify the auditor’s report, the auditor shall consider whether the financial report needs revision, shall discuss the matter with management and those charged with governance, and shall take the action appropriate in the circumstances.

23 When the financial report is revised, the auditor shall carry out the audit procedures necessary in the circumstances, shall review the steps taken by management and those charged with governance to ensure that anyone in receipt of the previously issued financial report together with the auditor’s report thereon is informed of the situation, and shall issue a new report on the revised financial report.

24 The new auditor’s report shall include an emphasis of matter paragraph referring to a note to the financial statements that more extensively discusses the reason for the revision of the previously issued financial report and to the earlier report issued by the auditor.

25 Under ASA 700, the auditor needs to date the new auditor’s report no earlier than the date of approval of the revised financial report. Under paragraphs 8 and 24, the auditor needs to extend the audit procedures to the date of the new auditor’s report. In some instances, law or regulation may permit the auditor to restrict the audit procedures regarding the revised financial report to the effects of the subsequent event that necessitated the revision. In such cases, the new auditor’s report would contain a statement to that effect.

26 When those charged with governance do not:

(a) take the necessary steps to ensure that anyone in receipt of the previously issued financial report together with the auditor’s report thereon is informed of the situation; or

(b) revise the financial report in circumstances where the auditor believes it needs to be revised,

the auditor shall take action with the objective of preventing future reliance on the auditor’s report and shall notify those charged with governance of this action.

27 Ordinarily, the action taken will depend on the auditor’s legal rights and obligations and the recommendations of the auditor’s lawyers.

28 It may not be necessary to revise the financial report and issue a new auditor’s report when issue of the financial report for the following period is imminent, provided appropriate disclosures are to be made in such a report.