Auditing Quiz 10 Essay question Although an auditor expresses an opinion on fina

Question

Auditing

Quiz 10

Essay question

Although an auditor expresses an opinion on financial statements as of the last of client’s fiscal year, the auditor is also responsible for material transactions or events occurring through the last day of field work that provide additional evidence about financial statement disclosures of the balance sheet date.

Required: Describe the procedures an auditor should apply at or near the completion of field work to identify material subsequent transactions or events.

Explanation / Answer

Subsequent events are events that occur between the balance sheet date and the issuance date of the auditor's report (which is not the same as the date of the report) that may affect the financial statements on which the report is rendered. The subsequent events period extends from the balance sheet date to the end of field work on the engagement.

            The types are:

            The auditor is required by GAAS to search for and to evaluate subsequent events up to the date of the auditor's report, which should be as of the end of field work. This responsibility is discharged by (1) being alert for subsequent events in performing year-end substantive tests after the balance sheet date, and (2) performing specific procedures at or near the completion of field work.

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