In general, an auditor has no obligation to notify users of events occurring after the audit report date. This includes a material transaction, the settlement of a contingency, or a matter affecting the entity's ability to continue as a going concern (Choices A, B, and D).

However, if information is discovered that existed at the report date and would have affected the audit report, the auditor is required to notify users of that information (eg, undisclosed related party transactions). Undisclosed related party transactions represent a GAAP departure, which, depending on the materiality, might have resulted in a modified report had they been identified.

When subsequently discovered facts arise, the auditor should:

• Make further inquiries with management and/or those charged with governance
• Determine whether the financial statements need revision
• Inquire how management intends to address the matter in the financial statements

Things to remember:
Subsequently discovered facts existed at the report date but were unknown to the auditor. Had the auditor known of the facts, they might have issued a revised auditor report. In this situation, the auditor should make further inquiries with management to determine an appropriate resolution to the situation.