The auditor has a responsibility to review transactions and activities occurring after the year-end to determine whether anything occurred that might affect the valuation or disclosure of the statements being audited.The auditing procedures required to verify these transactions are commonly referred to as the review for
A)contingent liabilities.
B)subsequent year's transactions.
C)late unusual occurrences.
D)subsequent events.

Question

Quizplus · Accepted Answer

The auditing procedures required to review transactions and activities occurring after the year-end are commonly referred to as subsequent events. These procedures are important as they help in determining whether any event has occurred after the year-end that might necessitate adjustments to the financial statements or disclosures. Hence, the best choice is option D, subsequent events. Options A, B, and C are incorrect as they do not accurately describe the procedures undertaken by auditors when reviewing transactions occurring after the year-end.

The Auditor Has a Responsibility to Review Transactions and Activities