A is corrent because when a contingency is resolved immediately subsequent to the issuance of a report which was qualified with respect to the contingency, the auditor is not required to take any action regarding the event. Resolution of the contingency after the issuance of the report is not subsequent discovery of facts existing at the date of the auditor’s report. Because the contingency did result in a qualified report, the auditor was aware of the facts existing at the date of the auditor’s report.
B is incorrect because resolution of a contingency after the issuance of the report is not subsequent discovery of facts existing at the date of the auditor’s report. Since the contingency was disclosed in the financial statements and audit report, the statements were not misleading at the time of issuance and do not have to be revised.
C is incorrect because no such communication is required.
D is incorrect because no such communication is required.
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