Thefieldwork for the December 31, 2021 audit of Kraken Corporation…
Question Answered step-by-step Thefieldwork for the December 31, 2021 audit of Kraken Corporation… The fieldwork for the December 31, 2021 audit of Kraken Corporation ended on February 13, 2022. The financial statements and auditor’s reports were issued and mailed to stockholders on February 23, 2022. In each of the situations below, select from the list at the end of the problem the appropriate action to be taken by the auditor. Assume all situations are material.Situations:On April 5, 2022, you discovered that on February 16, 2022, a flood destroyed the entire uninsured inventory in one of Pumpkin’s warehouses.On February 17, 2022 you discovered that on February 16, 2022, a flood destroyed the entire uninsured inventory in one of Pumpkin’s warehouses.On February 17, 2022, you discovered that on November 30, 20X8, a flood destroyed the entire uninsured inventory in one of Pumpkin’s warehouses.On April 5, 2022, you discovered that on March 30, 2022, a fire destroyed one of Pumpkin’s 10 plants.On April 7, 2022, you discovered that a debtor of Pumpkin went bankrupt on January 6, 2022.On January 16, 2022, a lawsuit was filed against Pumpkin for a patent infringement action that allegedly took place in early 2021. In the opinion of Pumpkin’s attorneys, there is a reasonable (but not probable) danger of a significant loss to Pumpkin.On February 19, 2022, Pumpkin settled a lawsuit out of court that had originated in 2021 and is currently listed as a contingent liability.Possible Actions:Adjust the December 31, 2021, financial statements.Disclose the information in a footnote in the December 31, 2021 financial statements.Request the entity revise and reissue the December 31, 2021 financial statements. The revision should involve an adjustment to the December 31, 2021 financial statements.Request the entity revise and reissue the December 31, 2021 financial statements. The revision should involve the addition of a footnote, but no adjustment, to the December 31, 2021 financial statements.No action is required.Your Answers: Business Accounting ACCT auditing Share QuestionEmailCopy link Comments (0)
