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 those events that happen after the balance sheet date but before the auditor's report issuance date. The auditor's responsibility is to search for and evaluate the effects of such events on the financial statements. Contingencies that exist at the balance sheet date but only become evident after the auditor's report may also require the auditor to take subsequent events into account. The auditor's report must include a paragraph to indicate whether the auditor has identified any subsequent events that materially affect the financial statements or the disclosures in the financial statements.

Subsequent Events for Which the Auditor Has a Responsibility to Actively