ACCA AAA INT Syllabus E. Completion, Review and Reporting - Purpose of a Subsequent Events Review - Notes 2 / 5
Auditors are responsible for their audit work from Y/E to issuing of FS
This duty is both Active and Passive
And ranges from
Active Duty
Between the Y/E and signing the FS
To search for all material events
Passive Duty
Between the signing and issue date
To act if they become aware of anything that may affect their audit opinion
Subsequent events are events which occur after the balance sheet date
The auditor must perform a subsequent events review
This involves:
Review post Y/E management accounts, budgets and cash flow forecast
Review of post Y/E board minutes
Review how management assess subsequent events and ask if any have been found
Obtain a management representation letter confirming this
Check post Y/E cash received to ensure:
1) Receivables are received and
2) NRV of inventory is as expected
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