What is a required action for the auditor concerning misstatements?

The correct action for the auditor concerning misstatements is to communicate uncorrected misstatements to management. This is essential because it allows management to be aware of any errors or omissions that could potentially impact the financial statements' accuracy and reliability. It is part of the auditor's responsibility to ensure that management understands the implications of these misstatements and encourages them to correct them if necessary.

This communication is critical because it helps maintain transparency and supports good governance practices within the organization. Additionally, discussing these misstatements with management can lead to further improvements in internal controls and financial reporting processes, which benefits both the company and its stakeholders.

In contrast, correcting all identified misstatements immediately may not be within the auditor's purview, as it is typically management's responsibility to make corrections. Documenting findings without taking action does not serve the purpose of alerting management to potentially significant issues that could mislead users of the financial statements. Lastly, delaying inquiries until the next audit cycle would be ineffective, as timely communication is important for addressing any significant discrepancies. This proactive approach fosters accountability and enhances the quality of financial reporting.