What Are The Auditor's Responsibility For Subsequent Events?

10, the auditor identifies subsequent events that require adjustment of, or disclosure in, the financial statements, the auditor should determine whether each such event is appropriately reflected in the financial statements in accor- dance with the applicable financial reporting framework. a.

What is the auditor's responsibility for detecting subsequent events?

The procedures include: Reviewing procedures management has established to ensure that subsequent events are identified. Reading minutes of the meetings of shareholders, the board of directors, and audit committee, held after period end. Reading the entity’s latest available interim financial statements.

What is the auditor's responsibility regarding subsequent events in the period after the date of the auditor's report? Before the sign-off of the auditor’s report, auditors have the responsibility of ensuring that all significant subsequent events that occurred between the date of the financial statements and the date of the auditor’s report have been adequately disclosed in and/or adjusted to the financial statements audited.

Who is responsible for identifying subsequent events?

ISA 560, Subsequent Events outlines the auditor’s responsibility in relation to subsequent events. For the purposes of ISA 560, subsequent events are those events that occur between the reporting date and the date of approval of the financial statements and the signing of the auditor’s report.

What is a subsequent event in audit process?

In this ISA, the term “subsequent events” is used to refer to both events occurring between the date of the financial statements and the date of the auditor’s report, and facts discovered after the date of the auditor’s report.

What are the two types of subsequent events?

What subsequent events require disclosure?

What period is covered by the auditor's review for subsequent events?

There is a period after the balance-sheet date with which the auditor must be concerned in completing various phases of his audit. This period is known as the “subsequent period” and is considered to extend to the date of the auditor’s report.

Why are subsequent events important?

Subsequent events can invalidate information used in the summary. The adjustment of records for subsequent events can improve a company’s financial picture, an important consideration for a business that hopes to attract lenders or investors.

How are subsequent events identified?

However the following procedures are typical of a subsequent events review: Enquiring into management’s procedures/systems for the identification of subsequent events; Inspection of minutes of members’ and directors’ meetings; Reviewing accounting records including budgets, forecasts and interim information.

What is commonly referred to in auditing as a subsequent event?

a) The subsequent events refer to an event occurring after the balance sheet date, but before the date of issuance of the auditor’s report. The subsequent event might have a material effect on the company’s financial statements. Therefore, it might require a disclosure and some adjustment to the financial statements.

What are the criteria for determining if an item qualifies as a subsequent event?

What is a Type 1 subsequent event?

Type I subsequent events provide evidence about conditions that existed on or before the balance sheet date. These events are recognized in the financial statements. … These events are disclosed, but are not recognized in the financial statements.

What are subsequent procedures?

1 adj You use subsequent to describe something that happened or existed after the time or event that has just been referred to.

What is a Nonrecognized subsequent event?

Nonrecognized subsequent events: these reflect conditions that arise after the financial statement date, such as a natural disaster that severely damages the business.

What is subsequent period?

Subsequent Period means a further period or periods of the same duration as the Initial Period and applies where the Initial Period is automatically extended in accordance with the provisions of condition 9.2.

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