Advanced Auditing, Assurance and Professional Ethics · Completion and Review

Events Occurring up to the Date of Auditor's Report (SA 560)

Updated 5 October 2026 · Fact-checked

These are events between the date of the financial statements and the date of the auditor's report that may need adjustment or disclosure. Under SA 560 you perform procedures to identify them, such as inquiry, review of minutes and latest interim statements. Then you judge whether each is adjusting or non-adjusting and report accordingly.

Understand Events Occurring up to the Date of Auditor's Report

Financial statements show the position at a reporting date, for example 31 March. The auditor signs the report weeks or months later. During this gap, things happen. A customer goes insolvent. A fire destroys stock. A court passes an order. Some of these change the numbers. Some only need disclosure. Some need nothing.

SA 560 first defines the dates. The date of the financial statements is the end of the latest period covered. The date of approval is when all the statements that comprise the financial statements have been prepared and those with recognised authority have asserted that they have taken responsibility for them. The date of the auditor's report is the date you choose to put on the report. It cannot be earlier than the date on which you obtained sufficient appropriate audit evidence on which the opinion is based. That evidence includes evidence that those with recognised authority have asserted responsibility for the financial statements, which is the approval.

The auditor's duty for this period is active. You must perform procedures designed to obtain sufficient appropriate evidence that all events up to the date of your report, which require adjustment or disclosure, have been identified. You do not wait for management to tell you. This duty ends at the report date. After that date you have no duty to search, though other rules apply if you learn of facts later.

The accounting side comes from the applicable framework. Under Ind AS 10, an adjusting event gives evidence of conditions that existed at the reporting date, so amounts are adjusted. A non-adjusting event arises from conditions after the reporting date, so only disclosure is needed when it is material. Your job is to test that management has classified and treated each event correctly. If it has not, you consider the effect on your opinion.

Think of it as a three-part chain: find the event, classify it, and test the treatment. Marks in exams are lost when students skip the first part and only talk about the last.

Key rules to remember

Auditor's duty (SA 560): Perform procedures to identify all events from the date of the financial statements up to the date of the auditor's report that need adjustment or disclosure; The duty runs only up to the date of the auditor's report. Procedures should take account of your risk assessment.
Typical procedures (SA 560 para 7): Understand management's procedures + inquire of management and those charged with governance + read minutes of meetings of owners, management and those charged with governance held after the date of the financial statements + read the entity's latest subsequent interim financial statements, if any; These are the SA 560 procedures. Depending on circumstances, you may add others, such as reviewing budgets and cash flow forecasts, or inquiring of legal counsel (the legal counsel inquiry comes from SA 501, not SA 560).
Adjusting event: Evidence of conditions existing at the reporting date → adjust the amounts recognised; Examples: settlement of a court case confirming a present obligation, insolvency of a debtor confirming impairment, discovery of fraud or errors.
Non-adjusting event: Conditions arising after the reporting date → disclose nature and estimate of financial effect if material; Examples: fire after year end, major acquisition, fall in market value of investments after year end.
Report date limit: Date of auditor's report cannot be earlier than the date on which you obtained sufficient appropriate evidence, including evidence that those with recognised authority have asserted responsibility for the financial statements (approval); Approval is part of the evidence, not a separate test. Do not date the report before you finish your subsequent events procedures.
Response to a material event: Properly treated → no effect on opinion; not properly treated → qualified or adverse opinion as per SA 705; Use qualified when the effect is material but not pervasive, adverse when material and pervasive.

How to solve Events Occurring up to the Date of Auditor's Report questions

Use this method for any case on events up to the report date. Write the answer in provision, facts and conclusion form.

1Fix the three dates from the case: year end, approval date and proposed report date. Note where the event falls.
2Confirm the event is within the window. Events during the period are tested as normal transactions. Facts that become known after the date of the auditor's report are dealt with under the later parts of SA 560: paras 10-13 for facts known before the financial statements are issued, and paras 14-17 for facts known after issue.
3Classify the event as adjusting or non-adjusting under Ind AS 10. Ask whether the condition existed at the reporting date.
4State the procedures you would perform to identify and verify it: understanding management's process, inquiry, minutes and latest interim statements. Add other procedures the case suggests, such as legal counsel inquiry (SA 501) where litigation exists.
5Test management's treatment. Adjusting events must change the numbers. Non-adjusting material events must be disclosed with nature and estimate of effect.
6Assess materiality and pervasiveness of any wrongly treated item.
7Conclude on the report: unmodified, modified under SA 705, or an Emphasis of Matter if the disclosure is adequate and fundamental to understanding. Also consider written representations and the report date.

Quickest way: Date, Classify, Test, Report

When to use it: Use for short MCQs and for 5-mark descriptive questions where time is tight.

Mark the dates and place the event on the timeline.
Ask one question: did the condition exist on the balance sheet date? Yes means adjusting. No means non-adjusting.
Write two or three procedures: inquiry of management, read minutes, read latest interim statements if any.
Write the treatment: adjust, or disclose if material.
Close with the opinion effect. Proper treatment means no modification. Improper treatment means qualified or adverse.

Common mistakes in Events Occurring up to the Date of Auditor's Report

Treating every post year-end event as an adjusting event
Students focus on the fact that the event is recent and material, not on when the condition arose.
Fix: Always test whether the condition existed at the reporting date. A fire after year end is non-adjusting. A debtor's insolvency that confirms an old dues problem is adjusting.
Saying the auditor's duty continues after signing the report
Students mix the duty to identify events with the separate rules for facts discovered later.
Fix: State that the active search duty ends at the date of the auditor's report. Facts found afterwards fall under a different part of SA 560.
Listing only inquiry of management as the procedure
Inquiry is the most memorable procedure, so students stop there.
Fix: Add understanding management's process, inquiry of those charged with governance, reading minutes and reading the latest interim financial statements, if any. Where the case suggests it, add budgets and cash flow forecasts or inquiry of legal counsel (SA 501) as further procedures.
Dating the report before completing subsequent events procedures
Students treat the report date as the date of signing the working papers.
Fix: The report date must reflect when sufficient appropriate evidence was obtained, including the subsequent events work and evidence that those with recognised authority have taken responsibility for the financial statements.
Qualifying the report for any non-adjusting event
Students think a big event automatically means a modified opinion.
Fix: If the event is properly disclosed, no modification is needed. You may add an Emphasis of Matter if it is fundamental to users' understanding. Modify only if treatment or disclosure is wrong.
Giving a conclusion without facts from the case
Students recite the standard from memory.
Fix: Quote the dates and amounts from the case, then apply the rule to them. This is how case-scenario answers earn marks.

Worked examples

Example 1

You are auditing Alpha Ltd, which follows Ind AS, for the year ended 31 March 2027. The financial statements were approved on 20 May 2027 and you plan to sign your report on 25 May 2027. On 18 May 2027 a major customer, Beta Traders, was declared insolvent. Alpha Ltd has a receivable of ₹40,00,000 from Beta at 31 March 2027, which it had considered fully recoverable. Management says no change is needed because the insolvency happened after the year end. Advise how you would deal with this.

Show the solution

Dates: year end 31 March 2027, approval 20 May 2027, proposed report date 25 May 2027. The insolvency on 18 May 2027 falls inside the window, so SA 560 applies.
Classification: a customer's insolvency after the year end usually confirms that the customer was already in financial difficulty at the reporting date. It gives evidence of a condition that existed then, so it is an adjusting event under Ind AS 10, unless the facts show the customer's financial position deteriorated only after year end.
Procedures: inquire of management how and when they learned of the position; read board minutes and the latest credit communications; examine the receivable ageing and Beta's payments after year end; read the insolvency order; assess whether any recovery is likely.
Treatment: Alpha Ltd should adjust its provision for expected credit loss for the ₹40,00,000 receivable, net of any amount reasonably expected to be recovered. Management's view is not supported by the framework.
Materiality: compare the amount with materiality for the financial statements. If it is material, the misstatement affects the opinion.
Reporting: ask management to adjust. If it adjusts, the opinion remains unmodified. If it refuses and the effect is material but not pervasive, give a qualified opinion under SA 705. If the effect is material and pervasive, give an adverse opinion. Obtain a written representation about subsequent events.

Answer: The insolvency is normally an adjusting event. Alpha Ltd should provide for the receivable. If management refuses and the amount is material but not pervasive, issue a qualified opinion. If it is material and pervasive, issue an adverse opinion.

Example 2

The audit of Gamma Ltd (Ind AS) for the year ended 31 March 2027 is nearly complete. Financial statements were approved on 10 May 2027. You plan to date your report 14 May 2027. During your procedures on 12 May 2027, the minutes of a board meeting show that a warehouse holding inventory worth ₹2,50,00,000 was destroyed by fire on 6 May 2027. The inventory is shown at cost in the balance sheet at 31 March 2027. The note on events after the reporting period is blank. The fire is not covered by insurance. Gamma Ltd's net worth is ₹80,00,00,000. Explain the audit response.

Show the solution

Dates: the fire on 6 May 2027 is after the year end and before the planned report date of 14 May 2027, so it falls within the SA 560 window. You found it on 12 May 2027 by reading the minutes, which is the type of procedure SA 560 expects. The statements as approved on 10 May 2027 do not disclose it.
Classification: the fire arose after the reporting date. The inventory existed and was properly valued on 31 March 2027. It is a non-adjusting event. The balance sheet amounts should not be changed.
Disclosure: Ind AS 10 requires disclosure of the nature of the event and an estimate of its financial effect, or a statement that an estimate cannot be made, if the event is material.
Materiality: ₹2,50,00,000 is about 3.1% of net worth (2,50,00,000 ÷ 80,00,00,000 = 0.03125). Assess it against materiality set for the audit and also consider its qualitative impact because it is uninsured. Treat it as material for disclosure unless your materiality threshold is higher.
Further procedures: inquire of management about the cause and extent of loss, insurance status and any effect on going concern or operations; get a written representation; confirm the report date is appropriate.
Approval and report date: ask management to amend the events note. The amended financial statements must be approved before you date your report, and the report date cannot be earlier than that approval. If the amended statements are approved on or before 14 May 2027, the planned date can stand. If approval is later, the report date moves to match.
Reporting: once management adds the disclosure and the amended statements are approved, no modification is needed, and you may include an Emphasis of Matter paragraph if the matter is fundamental to users' understanding. If management refuses to amend and the omission is material but not pervasive, issue a qualified opinion for inadequate disclosure. Issue an adverse opinion only if the effect is material and pervasive.

Answer: The fire is a non-adjusting event, so inventory in the balance sheet is not changed. It must be disclosed in the notes. Ask management to amend the disclosure. The amended statements must be approved before you date the report, and the report date cannot be earlier than that approval. If management does not disclose it and the omission is material but not pervasive, qualify the opinion. If it is material and pervasive, the opinion is adverse.

Exam tips

Draw a one-line timeline of the three dates before you write. Most case questions are solved by where the event sits on it.
In theory answers, name the standard clearly: SA 560 for the auditor's duty and Ind AS 10 for the accounting treatment. Keep both in view.
List at least four procedures. Examiners look for understanding management's process, inquiry of management and those charged with governance, reading minutes and reading the latest interim statements, if any. Add budgets, cash flow forecasts or legal counsel inquiry (SA 501) only as further procedures where the case suggests them.
Do not recommend a qualified opinion before saying you will first ask management to correct or disclose. Then state the consequence of refusal.
In MCQs, check whether the event arose before or after the report date. The same event can be handled under different rules depending on that.

Practice questions from Completion and Review

Events Occurring up to the Date of Auditor's Report in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CA IntermediateEvents Occurring After the Balance Sheet Date

Events Occurring up to the Date of Auditor's Report: frequently asked questions

What are the procedures for identifying events up to the auditor's report date?

Under SA 560 para 7 you obtain an understanding of management's procedures for identifying such events. You inquire of management and those charged with governance. You read minutes of meetings of owners, management and those charged with governance held after the date of the financial statements, and the entity's latest subsequent interim financial statements, if any. Depending on circumstances, you may add procedures such as reviewing budgets and cash flow forecasts or inquiring of legal counsel under SA 501.

What is the difference between an adjusting and a non-adjusting event?

An adjusting event gives evidence of a condition that existed at the reporting date, so the recognised amounts are changed. A non-adjusting event relates to a condition that arose after the reporting date, so only disclosure is made if it is material. The classification follows Ind AS 10.

Until when must the auditor look for subsequent events?

The active duty runs up to the date of the auditor's report. After that date you have no obligation to perform procedures. If you later become aware of a fact that would have affected the report, separate provisions of SA 560 apply.

Does a material subsequent event always lead to a modified opinion?

No. If the event is correctly adjusted or adequately disclosed, your opinion stays unmodified. You may add an Emphasis of Matter paragraph if it is fundamental to understanding. You modify the opinion only when treatment or disclosure is inadequate and material.