An example of a Type I subsequent event would be _______.
A)a sudden change in senior management after the financial statement date
B)a filing with the Securities and Exchange Commission (SEC) of an amended form 10K after the financial statement date
C)the bankruptcy of a client's customer after year-end as a result of poor financial condition that existed as of the balance sheet date
D)the bankruptcy of a client's customer after year-end as a result of poor financial condition that existed after the balance sheet date

Question

Quizplus · Accepted Answer

Type I subsequent events are events that provide additional evidence about conditions that existed at the balance sheet date. The bankruptcy of a client's customer after year-end due to poor financial condition that existed as of the balance sheet date falls under this category, as it provides further evidence about the customer's ability to pay that existed at the balance sheet date.

An Example of a Type I Subsequent Event Would Be