Final answer:
The situation where auditors neglect necessary audit procedures before issuing the audit report is known as an audit omission, resulting in an audit failure.
Step-by-step explanation:
The situation described refers to an audit failure, specifically known as an audit omission. This occurs when auditors neglect to execute necessary audit procedures before the audit report release date. Audit failures like this can lead to an incomplete understanding of the financial situation of the entity being audited, potentially resulting in a report that does not accurately reflect the entity's financial status. Such omissions can have serious implications, including legal consequences for the auditors and financial ramifications for stakeholders who rely on the audit's findings.
Auditors are required to follow a set of standards and procedures to ensure the accuracy and reliability of their audit reports. When procedures are omitted, it indicates a lapse in the audit process, which can affect the validity of the audit opinion provided. It is essential for auditors to thoroughly review their work and ensure that all relevant and necessary procedures have been completed before finalizing the audit report.