Page 120 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
(CNO-SA560.040) Definition of Subsequent Events
Events: Events after the balance sheet date till the date of signing Audit Report
Facts: Facts which were existing as on date of signing Audit Report but which became known to auditor
afterwards. Audit procedures differs when auditor came to know about facts-
• Before publishing FST & AR
• After publishing FST & AR

(CNO-SA560.060) Events Occurring Between the Date of The Financial Statements and The Date Of The
Auditor's Report
Duty of Auditor:
• Even after year end auditor is supposed to perform audit procedures and collects SAAE that management
has identified events which needs adjustments and things which needs disclosures and gave them proper
accounting treatment as per FRF.
• If Auditor has checked SE of some areas like debtor, creditor etc., then no need to check them again.
Audit Procedures:
Interact
• Understand management procedures to identify subsequent events.
• Inquiring management and TCWG whether any subsequent event has occurred.
Documents
• Read minutes of meetings or where minutes are not available inquire about the matters discussed in such
meetings (Eg: - Information about proposed dividend, bonus issue etc.)
• Read entity latest subsequent interim financial statements
Treatment of Adjusting Events:
• If Auditor identifies events require adjustment or disclosure.
• Auditor should ensure that such events are properly reflected in FST as per AFRF
Written Representation:
• Written representation from management or TCWG, assuring that all the events occurring after the date of
FST are properly analysed and accounted for as per AFRF.

(CNO-SA560.080) Examples of Inquiry for Subsequent Event (Based On IFRS / Ind As)
Inquiry About Uncertainties:
Auditor may inquire from management or TCWG regarding current status of financial items which are
uncertain and accounted on the basis of preliminary or inconclusive data
Auditors specific inquires in following matters-
Specific Enquiries
Assets
Sales/Acquisitions: Inquiry about whether sales or acquisitions of assets have occurred or are planned.
Appropriation/Destruction: Inquiry about assets being appropriated by the government or destroyed by fire

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