Subsequent Events And Related Issues

Question 1

What does an auditor do to inquire about the occurrence of subsequent events?

Answer 1

inquire about legal counsel concerning litigation, claims, and assessments arising after year-end (usually occurs in review stage)

Inquiring as to whether any unusual adjustments were made after year end.

Question 2

subsequent events that arose after year-end are important because?

Answer 2

require disclosure (not adjustment) to keep the financials from being misleading

Question 3

what is the auditors responsibility in terms of events occurring after the report date?

Answer 3

limit to the specific event referenced

Question 4

what does an auditor do to inquire evidence about subsequent events?

Answer 4

investigate changes in capital-stock, long-term debt, and working capital at year-end

Question 5

The Professional Standards indicate that, “The auditor’s report should not be dated earlier than the date on which the auditor has obtained sufficient appropriate audit evidence to support the opinion.

Answer 5

true