A Type I subsequent event usually requires
A) An adjustment to the financial statements.
B) No adjustment to the financial statements.
C) Withdrawal from the engagement.
D) None of the above.

Question

Quizplus · Accepted Answer

A Type I subsequent event is an event that provides additional information that existed prior to the financial statement date and would require an adjustment to the financial statements. Therefore, the best choice is A, which states that an adjustment to the financial statements is required. Choice B is incorrect as it implies that no adjustment is required. Choice C is incorrect as withdrawal from the engagement is only necessary in certain circumstances, such as a disagreement over the accounting treatment of a subsequent event. Choice D is incorrect as it does not provide a correct answer.

A Type I Subsequent Event Usually Requires