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Unformatted text preview: PI # 3 1. (3 points) Auditors must be concerned with events that occur subsequent to the balance sheet date, because the events may need to be reflected in the financial statements. a. Describe the two general types of subsequent events. • Events that provide additional evidence about the conditions that existed at the date of the balance sheet. • Events that provide evidence about conditions that did not exist at the date of the balance sheet, but arose after that date b. What is the auditors' responsibility with respect to detecting subsequent events? • A subsequent event is an event occurring between the balance sheet date and last day of fieldwork. Depending upon the type of subsequent event, the auditor will either adjust the financial statements or disclose the subsequent event in the financial statements Auditor has no responsibility to detect subsequent events; the auditor should inquire of management as to whether it is aware of any subsequent events through the date of the service...
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- Spring '08
- Balance Sheet, Financial audit, Auditor's report