D issue a revised auditors report and distribute it

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Unformatted text preview: as a result of the deteriorating financial condition of the entity's principal customer that led to the customer's bankruptcy. Management then refused to adjust the financial statements for this subsequent event. The CPA determined that the information is reliable and that there are creditors currently relying on the financial statements. The CPA's next course of action most likely would be to: a. Notify the entity's creditors that the financial statements and the related auditor's report should no longer be relied on. b. Notify each member of the entity's board of directors about management's refusal to adjust the financial statements. c. Issue revised financial statements and distribute them to each creditor known to be relying on the financial statements. d. Issue a revised auditor's report and distribute it to each creditor known to be relying on the financial statements. CPA-03107 Choice "b" is correct. Since the material loss affects the audit report and there are creditors relying on the financia...
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