Subsequent events for which the auditor has a responsibility to actively search are defined as events that occur subsequent to the
A) Balance sheet date.
B) Date of the auditor's report.
C) Balance sheet date but prior to the date of the auditor's report.
D) Date of the auditor's report and concern contingencies that are not reflected in the financial statements.

Question

Quizplus · Accepted Answer

Subsequent events are events that occur after the balance sheet date but before the date of the auditor's report. The auditor has a responsibility to actively search for subsequent events that may require adjustment of or disclosure in the financial statements. Contingencies that are not reflected in the financial statements are also among the subsequent events for which the auditor has a responsibility to actively search. Thus, while D is partially correct in that the auditor's responsibility extends to contingencies, it is not correct that it only concerns events that are post-audit report.

Subsequent Events for Which the Auditor Has a Responsibility to Actively