If an auditor becomes aware after the date of the auditor’s report but before the financial statements are issued, of a fact that may materially affect the financial statements, the first step the auditor should take is to: 1

If an auditor becomes aware after the date of the auditor’s report but before the financial statements are issued, of a fact that may materially affect the financial statements, the first step the auditor should take is to:

1.       alert the appropriate regulatory body.

2.       discuss the matter with management and, if appropriate, those charged with governance.

3.       determine if the financial statements need to be revised.

4.       make the appropriate adjustments to the financial statements