Purchase Solution

Audit: Subsequent Events Procedures

Not what you're looking for?

Ask Custom Question

The period between the balance sheet date and the date of the auditor report is called the subsequent period. Audit procedures performed in this period are called the subsequent events review.

The significance of the audit report date is that it is the cutoff point for an auditor's responsibility to be informed about events and transactions that occur after the date of the financial statements but that have a material effect on those statements.

Required:
What are the two types of subsequent events in terms of their effects on the financial statements? Give an example of each type of subsequent events?

List the type of procedures performed during a subsequent events review.

Purchase this Solution

Solution Summary

The solution explains the two types of subsequent events which could become evident during the subsequent review procedures including an example of each. The seven basic procedures that are performed prior to the report date are listed. They comprise a basic audit program for the subsequent event period.

Solution Preview

Type I events are those which cause an adjustment to be made to the financial statements under audit. The review might disclose additional information about an estimate made at year end. Given additional information, the estimate should be changed. For example, the settlement of an estimated liability after the date of the ...

Purchase this Solution


Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.