(A1)M9-M12

Question 1

What are recognized subsequent events and what do they require?

Answer 1

Exist before or as of the BS date

Adjustment and disclosure

Question 2

What are unrecognized subsequent events and what do they require?

Answer 2

Occur after BS date but before issuance of FS

Disclosure

Question 3

What type of procedures should auditor actively perform during the subsequent period (between FS date and audit report date)? “PRIME”

Answer 3

(P)ost BS transactions- review for proper cutoff
(R)epresentation letter- obtain from management
(I)nquiry of client’s legal counsel and management
(M)inutes- review subsequent period BOD minutes
(E)xamine latest interim FS and compare to FS under audit

Question 4

an auditor may express an opinion on an incomplete presentation that is otherwise in accordance with GAAP if…

Answer 4

auditor includes an emphasis-of-matter paragraph in the audit report that states the purpose for which the presentation is prepared