Final answer:
The auditor has no obligation to inquire further about audited financial statements post-issuance unless new information on undisclosed related party transactions arises, a contingency affecting a qualified audit report is resolved, or developments threaten the entity's going concern status. The correct option is D.
Step-by-step explanation:
After the issuance of the auditor's report, the auditor generally has no obligation to perform any further audit procedures regarding the audited financial statements. However, there are specific circumstances under which the auditor might be required to take further action. These include:
- If new information is discovered concerning previously undisclosed related party transactions of the audited period.
- Upon the final resolution of a contingency that resulted in a qualification of the auditor's report, to determine whether financial statements require adjustment.
- If there is a subsequent development that might affect the entity's ability to continue as a going concern.
Situations like an investigation by a peer review committee do not typically require the auditor to take action regarding previously issued financial statements, unless the investigation reveals issues that would affect the auditor's report.
It is essential for auditors to consider these situations as they have a significant impact on the integrity and reliability of financial reporting. In cases where new evidence suggests that the financial statements may be materially misstated, the auditor may need to re-evaluate the audit opinion or undertake additional procedures to verify the newly identified information.