Subsequent Event

Subsequent events occur between the balance sheet date and the financial
statement issuance date. It is the responsibility of an organization’s management team
to identify and evaluate subsequent events to determine if they have a material impact
on the financial statements. If a subsequent event is found to have a material impact, it
should be reflected in the financial statements or disclosed in the notes to the financial
statements.
In auditing, a subsequent event refers to an event or transaction that occurs after
the balance sheet date but before the financial statements are issued. Auditors are
required to consider such events to ensure that the financial statements are not
materially misstated and provide a true and fair view of the entity's financial position.
Basic elements of Audit report
An audit report is a formal document that communicates the results of an audit
performed by an independent auditor. The basic elements of an audit report typically
include:
a) Title
b) Addressee
c) Introductory Paragraph
d) Management's Responsibility
e) Auditor's Responsibility
f) Basis for Opinion
g) Scope Paragraph
h) Opinion Paragraph:
i) Emphasis of Matter or Other Matter Paragraphs (if applicable
j) Signature and Date

Title: The report is usually titled as an "Independent Auditor's Report" to clearly

indicate the independence of the auditor from the entity being audited.
Addressee: The report is addressed to the shareholders, board of directors, or other
appropriate parties, depending on the engagement.
Introductory Paragraph: This section identifies the financial statements that have
been audited, including the specific dates or periods covered by the audit.
Management's Responsibility: This section outlines the responsibility of the
company's management for preparing and presenting the financial statements. It also
indicates that the auditor's responsibility is to express an opinion on these financial
statements based on the audit.
Auditor's Responsibility: The auditor describes their responsibility to conduct the
audit in accordance with auditing standards, which includes assessing the risk of
material misstatement in the financial statements.
Basis for Opinion: This section explains the basis for the auditor's opinion. It states
that the audit was conducted in accordance with generally accepted auditing standards
(GAAS) and includes reference to the auditor's judgment and consideration of
materiality.
Scope Paragraph: The auditor provides information on the scope of the audit,
including key audit procedures performed. This section often outlines the testing and
verification processes used to form the basis for the opinion.
Opinion Paragraph: The auditor expresses a clear and unambiguous opinion on the
financial statements. The opinion may be unqualified (clean), qualified, adverse, or a
disclaimer, depending on the findings of the audit.
Emphasis of Matter or Other Matter Paragraphs (if applicable): In certain
situations, the auditor may include additional paragraphs to draw attention to specific
matters. For example, if there is a significant uncertainty or a going concern issue.
Signature and Date: The report is signed by the auditing firm or individual auditor, and
the date of the report is included to indicate the period when the audit was concluded.
Auditor's Address: The auditor's address may be included at the end of the report for
reference.