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

What is NOT true regarding the auditor's responsibility for subsequent events?

1. The auditor must make inquiries between the date of the auditor's report and submission.

2. The auditor has no active responsibility after the date of the auditor's report.

3. The auditor is responsible for inquiries between the date of the financial statements and the report date.

4. The auditor must make continuing inquiries until sufficient audit evidence is obtained.

The correct answer is: The auditor must make inquiries between the date of the auditor's report and submission.

The assertion that the auditor must make inquiries between the date of the auditor's report and submission is not true. After the date of the auditor's report, the auditor does not have an active responsibility to look for subsequent events. The primary responsibility for identifying subsequent events lies with management, and while auditors may consider certain information that comes to their attention after the report has been issued, they are generally not required to conduct further inquiries after the report date. On the contrary, inquiries are indeed required between the date of the financial statements and the date of the auditor's report, as this is the period when the auditor can still influence the financial statements based on findings related to subsequent events. The auditor must also gather sufficient audit evidence relevant to these subsequent events that may require adjustment or disclosure in the financial statements up until the report date. Overall, this means that the auditor’s activities and responsibilities are contingent upon ensuring that they provide enough evidence related to events up to the report date, but they are not expected to continue those inquiries once the report is finalized.