Jones, CPA, examined the 20X5 financial statements of Ray Corp. and issued an unmodified opinion on March 10, 20X6. On April 2, 20X6, Jones became aware of a 20X5 transaction that may materially affect the 20X5 financial statements. This transaction would have been investigated had it come to Jones' attention during the course of the examination. Jones should
a. Take no action because an auditor is not responsible for events subsequent to the issuance of the auditor's report.
b. Contact Ray's management and request their cooperation in investigating the matter.
c. Request that Ray's management disclose the possible effects of the newly discovered transaction by adding an unaudited footnote to the 20X5 financial statements.
d. Contact all parties who might rely upon the financial statements and advise them that the financial statements are misleading.
Answer: B
CPA Exam
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