What action should an auditor take upon identifying a misstatement?

When an auditor identifies a misstatement, it is essential to address it through communication with the client to ensure that the financial statements accurately reflect the company's financial position. Asking the client for adjustments where necessary is a fundamental part of maintaining the integrity of the audit process. This action aligns with the auditor’s responsibility to ensure that the financial statements are free from material misstatement, whether due to fraud or error.

By requesting adjustments, the auditor allows the client the opportunity to correct any inaccuracies. The process of dialogue and negotiation helps in achieving transparency and accuracy. The auditor can evaluate whether the misstatement is material and if adjustments are needed to resolve it.

This approach also protects the auditor from misleading conclusions that could arise from uncorrected misstatements and upholds the credibility of the audit. It fosters a collaborative relationship between the auditor and the client, which is crucial for effective financial reporting and compliance with relevant regulatory standards.

The other options do not consider the auditor's responsibility for ensuring accuracy and transparency in financial reporting. Making no adjustments, ignoring minor misstatements, or issuing an adverse opinion without proper corrective measures do not reflect best practices in auditing standards and can lead to significant implications for both the financial statements and the auditor's reputation.