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You are the auditor of Fintry, a listed company for the year ended 31 December 20X2. The recoverability of receivables had been a contentious issue during the audit but by 1 April 20X3 (the day that the directors had approved the financial statements) you had sufficient evidence to allow you to agree with the directors' view that there was no need to make any provision for an amount owing from Stobswell Co, a major customer. An unmodified audit report was signed on 1 April. On 4 April 20X3 you read in the newspaper that Stobswell Co has gone into liquidation and that it is unlikely that creditors will be paid. The amount involved is material to the profit of Fintry plc but when you discuss the matter with the directors they refuse to take any steps to revise the financial statements. What action should you take in accordance with ISA 560 Subsequent events? A. Perform procedures to identify additional events after the reporting period. B. Take no action, the auditors responsibility ceases once the audit report is issued. C. Take steps to prevent reliance on their report. D. Communicate directly with shareholders explaining the adjustment which should have been made to the financial statements. |