After issuance of the auditor's report, the auditor has no obligation to make any further inquiries with respect to audited financial statements covered by an auditor's report unless
A. A lawsuit in which risk of loss was considered remote is resolved in the company's favor.
B. A development occurs that may affect the entity's ability to continue as a going concern.
C. A material fraud is initiated by an employee after the report is issued.
D. Evidence of significant, non-arms-length, related party transactions that happened prior to year-end is discovered.
Answer: Evidence of significant, non-arms-length, related party transactions that happened prior to year-end is discovered.
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