Subsequent Events

 Events occurring between the date of the FS and the Date of the auditor’s report
 Facts that become known to the auditor after the date of the auditor’s report

Reviewing Subsequent Events

2 types of subsequent events are:

1. Type 1: adjusting events – those that provide evidence of conditions that existed at the
date of FS
2. Type 2: Non-adjusting events – those that provide evidence of conditions that arose after
the date of FS

Events between the date of the FS and Date of the Audit report
 Obtaining understanding of any procedure management regarding identification of
subsequent events
 Inquiry of management and TCWG
 Reading minutes of meetings
 Reading the entity’s latest interim FS
 Written representation letter

Facts that become known to the auditor after the date of the auditor’s report
 No obligation to perform any audit procedures regarding the FS after the date of the
auditor’s report
 Except, a fact becomes known to the auditor that, had it been known to the auditor at the
date of the auditor’s report, may have caused the auditor to amend the auditor’s report

Facts that become known to the auditor after the date of the auditor’s report (before FS
issuance)
 Discuss the matter with management/TCWG
 Determine whether the FS need amendment & if so,
 Inquire how management intends to address the matter in the FS

Facts that become known to the auditor after the date of the auditor’s report (Before FS
Issuance)

1. If the management amends the FS, the auditor shall:

 Carry out necessary audit procedures
 Provide a new auditor’s report with Emphasis of Matter paragraph or other matter
paragraph.

2. When management does NIOT amend the FS:

 Auditor’s report not yet provided – the auditor shall modify the opinion; or
  Auditor’s report already provided, the auditor shall notify management and, TCWG, nit to
issue the FS to third parties before the amendments.

Facts that become known to the auditor after the date of the auditor’s report (After FS Issuance)
 Similar as when the facts have been discovered after the audit report but before
issuance of FS.
 The auditor shall review the steps taken by management to ensure that anyone in
receipt of FS is informed of the situation.
 If the management does not take the necessary steps - auditor shall notify management
and TCWG that the auditor will seek to prevent future reliance on the audit report.

Subsequent discovery of omitted audit procedures

Auditor should assess its importance.
 If considered important – the procedures or alternate procedures should be promptly
applied.
 If procedure is applied and misstatements are detected – the auditor should review
his/her responsibilities.
 If the client does not allow the auditor to apply the necessary procedures – the auditor
should consult his/her attorney as to appropriate action.

Dating of New Audit Report

1. Single dated – use the date of subsequent event as the date of the new audit report
2. Dual- dated – use the dates of the original report and the date of the subsequent event,
to disclose the work done only on that event after the original audit report date. (e.g.,
March 1, except as to Note Y, which is as of March 15)