Audit & Assurance is a module for students studying Accounting and Finance. This document covers: subsequent events review, post balance sheet events, adjusting events, non-adjusting events, POST SOFP/Balance Sheet Events/Audit Procedures, Before issuing the audit report, After issuing the audit re...
Coursework Guidance, Professional Ethics and Internal Audit - AUDIT AND ASSURANCE - Lecture 7 notes
Subsequent Events - AUDIT AND ASSURANCE - Seminar 11 notes
Audit and Assurance Exam Topics - AUDIT AND ASSURANCE - Seminar 7 notes
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London South Bank University (LSBU)
London South Bank University
Audit and Assurance (BAF6AAS)
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Module: Audit and Assurance
Lecture 11 – Subsequent Events/Audit Report
We are going to be looking at subsequent events, which are events that happen
around the end of the financial year and in between the end of the financial year and
the finalisation of the audit. It may need to be noted in the accounts. It may need to
be flagged up to management.
The topic of subsequent events shouldn’t be unfamiliar to you because you would
have come across this in the Financial Reporting module.
Subsequent Events Review
IAS 10 has 2 objectives:
To specify when entity should make adjustments to the financial statements
for events that occur after the balance sheet date, but before they are
authorised for issue.
To specify the disclosures that should be made in relation to events that have
occurred between the balance sheet date and the date they are authorised for
issue.
The dates are the same for either disclosure or adjustments – between the
end of the year and when you publish the account.
Subsequent Events Review
Auditors need to sign the report as close to when the director signs it, NOT before.
Once the director has signed it, then the auditor signs it.
Post Balance Sheet Events
These can be favourable or unfavourable events that occur between the balance
sheet date and the date on which the director approves the financial statements.
Adjusting Events – for events that provide evidence or conditions that already
existed at the balance sheet date, these should be adjusted in the financial
statement.
Example:
Fraud and error, insurance claim, litigation, impairment of an asset.
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