Question

Briefly describe two common steps auditors take to learn about the existence of subsequent events.

Answer 1

Answer:

Subsequent events are those events which are occurred between the date of the financial statements & the date of the auditor's report, and facts that become known to the auditor after the date of the auditor's report.

Following are the steps auditors can take to learn about the existence of subsequent events:

• The auditor shall obtain the sufficient & appropriate audit evidence that all events occurring between the date of the financial statement and the date of the auditors report that requires adjustment of, or disclosure in the financial statement have been identified.
• The auditor shall obtain an understanding of any procedures management has established to ensure that subsequent events are identified. The auditor should be inquiring of management & those charged with governance, read the minutes if any, of the meeting of the entity 's owners, management & those charged with governance that is held after the date of financial statements. Auditors also learn about the existence of subsequent by reading the entity's latest subsequent interim financial statement, if any.