Page 213 - CA Inter Audit PARAM

CA Ravi Taori

QNO Subsequent Event- Meaning Old Course -- (P16M/M17M)
560.01 Bhaskar CNO- SA560.040 New Course – (SM25)
Explain the meaning of the term subsequent events as used in the SA 560.
Answer Meaning of Subsequent Events:
SA 560 on “Subsequent Events” defines the term “subsequent events” as events occurring between the date
of the financial statements and the date of the auditor’s report, and facts that become known to the auditor
after the date of the auditor’s report., “subsequent events” also refer to significant events which occurred up
to the date of report of the auditor of that component. Thus, subsequent events are those events which occur
after the date of the balance sheet till the audit report is signed by the auditor.

QNO Subsequent Event Definition by FRFs (In General) & SA 560 Old course-- (N21R/N23M)
560.02 Bhaskar CNO- SA560.020
SA 560, “Subsequent Events” deals with the auditor’s responsibilities relating to subsequent events in an audit
of financial statements. Financial statements may be affected by certain events that occur after the date of

the financial statements. Many financial reporting frameworks specifically refer to such events. Explain those
events and also define subsequent events
Answer SA 560, “Subsequent Events” deals with the auditor’s responsibilities relating to subsequent events in
an audit of financial statements.

Financial statements may be affected by certain events that occur after the date of the financial
statements. Many financial reporting frameworks specifically refer to such events. Such financial
reporting frameworks ordinarily identify two types of events:

(a) Those that provide evidence of conditions that existed at the date of the financial statements;
and
(b) Those that provide evidence of conditions that arose after the date of the financial statements.

SA 700 explains that the date of the auditor’s report informs the reader that the auditor has considered
the effect of events and transactions of which the auditor becomes aware and that occurred up to that
date.

Subsequent events refer to events occurring between the date of the financial statements and the date
of the auditor’s report, and facts that become known to the auditor after the date of the auditor’s
report.

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