Audit 1 Module 9 - Subsequent Events

Question 1

Subsequent events as an event or transaction that occurs

Answer 1

After the balance sheet date but before the financial statements are issued

Question 2

Subsequent events can be divided into two categories

Answer 2

Recognize subsequent events
Nonrecognized subsequent events

Question 3

Examples of recognized subsequent events include (2)

Answer 3

Settlement of litigation
Loss on an uncollectible receivable

Question 4

The auditor should obtain an understanding of the procedures Management has established identify subsequent events and should perform the following procedures

Answer 4

Post balance sheet transactions representation letter
inquiry
minutes
and examine the latest interim fs and compare them w the fs under audit

Question 5

If the author believes that financial statements needs to be revised to reflect a subsequent event and management does NOT make the revision auditor should express a _____ or _____ opinion

Answer 5

Qualified or adverse