If there is a material inconsistency in documents containing audited financial statements, what is the auditor required to do?

When there is a material inconsistency in documents containing audited financial statements, the auditor is required to determine if the statements or other information need revision. This involves a careful assessment of the inconsistency to understand its nature and significance in relation to the audited financial statements.

The auditor must evaluate whether the inconsistency affects the audit opinion or whether it indicates that management may need to correct the financial statements or the accompanying disclosures. By determining the need for revision, the auditor can ensure that the financial statements are presented fairly and in accordance with the relevant accounting standards. This step is crucial in maintaining the integrity of the audit process and protecting users of the financial statements.

In contrast, revising the entire financial statement or issuing a new set of financial statements would be inappropriate actions as these steps are not typically within the auditor's responsibilities. Direct communication with management may occur, but it's primarily centered around clarifying or obtaining additional information rather than an action required solely based on the existence of a material inconsistency. Therefore, the emphasis is on assessing the need for revisions to uphold the quality and reliability of the audit report.