Final answer:
The correct action for an auditor suspecting year-end revenue misstatements in Pokogo Enterprises' financials would be to perform sales cutoff procedures to ensure proper recognition of sales. Less testing or issuing opinions are responses after necessary procedures, and increased risks warrant more, not less, substantive testing.
Step-by-step explanation:
If you are auditing the financial statements of Pokogo Enterprises and believe there is a risk that revenues earned after year-end may be included in the current year's income, the appropriate action would be to perform sales cutoff procedures. A sales cutoff procedure is a substantive test that auditors perform to ensure that sales are recognized in the correct accounting period. It involves examining sales invoices and shipping documentation near year-end to verify that the revenue recognition criteria have been satisfied in the appropriate period. If sales made after year-end are being improperly included in the current year's results, this represents a misstatement that needs to be identified and corrected.
Issuing a disclaimer of opinion or a qualified opinion are responses to situations where the auditor has identified a significant uncertainty or a disagreement with management on the treatment of financial information, but this is done after conducting all the necessary audit procedures, including sales cutoff tests if needed. Planning to do less substantive testing at year-end is not an appropriate response to the identified risk. On the contrary, when there is a heightened risk of material misstatement, the auditor should plan to perform more extensive testing to gain reasonable assurance about the financial statements.