Final answer:
If an auditor learns of significant post-reporting date events, they should verify the information, request revised financial statements, notify the entity about the report's applicability, and communicate the impact to users relying on the statements.
Step-by-step explanation:
If an auditor learns that the entity they audited has decided to sell the shares of a subsidiary which accounts for a significant portion of its revenue and net income, after an unqualified opinion has been issued, they should consider taking several steps. First, the auditor should determine whether the information is reliable. If it is deemed reliable, they should then request that revised financial statements be issued. Furthermore, it is prudent for the auditor to notify the entity that the auditor's report may no longer be associated with the financial statements if they consider that the sale represents a subsequent event that could significantly affect the financial statements. Lastly, the auditor should describe the effects of this new information in communications with persons known to be relying on the financial statements. Complete inaction is not advisable since this new transaction could significantly mislead the financial statement users if not properly disclosed and accounted for.
After an audit report containing an unqualified opinion on a nonpublic entity's financial statements is issued, if the auditor learns that the entity has decided to sell the shares of a subsidiary that accounts for a significant portion of its revenue and net income, the auditor should take necessary actions to address this subsequently discovered information.The correct action for the auditor in this scenario would be to determine whether the subsequently discovered information is reliable and if it is deemed reliable, request that revised financial statements be issued. This ensures that all relevant information is correctly reflected in the financial statements and the auditor's opinion remains accurate and up-to-dateThe auditor should also describe the effects of this subsequently discovered information in communications with persons known to be relying on the financial statements. This ensures that stakeholders are informed about the new information and can make informed decisions based on the updated financial statements.