Subsequent Events

Question 1

PRIME Test to identify Subsequent Events

Answer 1

P-Post Balance Sheet Transactions
R-Representation Letter from Management
I-Inquiry to legal counsel, claims, and assessment
M-Minutes 
E-Examine latest financial statements

Question 2

Evaluation Period

Answer 2

auditor is responsible for period of time between the date of statements up until the date the auditor report is issued. However, auditor has no active responsibility to make any inquires or to perform any further auditing procedures to discover events after the original date of the auditors report unless it comes to the auditors attention.

Question 3

Material Information after issuance date

Answer 3

advise client to revise statements and make necessary disclosure
auditor report should not be relied upon

Question 4

Client Refusal

Answer 4

qualified or adverse audit opinion