The auditor of XYZ Ltd. performed audit procedures to obtain sufficient appropriate audit evidence covering each and every area impacting the…

The auditor of XYZ Ltd. performed audit procedures to obtain sufficient appropriate audit evidence covering each and every area impacting the financial statements of the company by 20th July 2025. Before signing the auditor's report on 16th September 2025, the auditor became aware of a fire accident at the company's Yarn Factory on 10th August 2025, destroying a large part of inventory. Auditor's responsibilities in such a situation are: (i) Perform audit procedures designed to obtain sufficient appropriate audit evidence that all events occurring between the date of financial statements and the date of auditor's report that require adjustment or disclosure in the financial statements have been identified. (ii) If such subsequent events that require adjustment or disclosure in the financial statements have been identified, it shall be determined whether each such event is appropriately reflected in those financial statements. (iii) Obtain a written representation from management that all events occurring subsequent to the date of financial statements and for which appropriate adjustment has been done or required disclosure has been made.