Which of the following regarding financial statement audits is incorrect? Substantive procedures are performed to detect misstatements in response to assessed risks of MM. Audit reports are addressed to management, and audit results (e.g., uncorrected misstatements) are communicated only to management. Auditors evaluate misstatements detected for materiality and consider both quantitative and qualitative factors when doing so. Auditors exercise significant judgment when planning and performing engagements. The following material events occurred between the balance sheet date (December 31st ) and the audit report date. Which event would require only disclosure in, and not adjustment of, the December 31 st financial statements? Settlement of a lawsuit on January 3 rd of the subsequent year for an amount lower than that accrued on December 31st. Payment made on January 10 th of the subsequent year for December's rent. Receipt of inventory on January 6th of the subsequent year that was ordered on December 28th (when title transferred to the client). Issuance of common stock on January 2nd of the subsequent year