Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · Subsequent events and going concern

Tamsin Co's auditor wants to identify events between the period end and the date of the auditor's report that may require adjustment or disclosure. Which of the following is a procedure ISA 560 expects the auditor to perform for this purpose?

The auditor should inquire of management about subsequent events. ISA 560 expects procedures such as understanding management's identification process, reading minutes and recent interim information, inquiring of management and those charged with governance, and obtaining written representations. Representations alone are insufficient, and blanket confirmations or re-performing prior year work are not required.

  1. AInquire of management about whether any subsequent events have occurred that might affect the financial statementsCorrect
  2. BRe-perform the prior year audit of opening balances
  3. CConfirm all year-end payables directly with suppliers regardless of risk
  4. DObtain a written representation from the audit committee chair only, with no other work

Explanation

ISA 560 procedures include obtaining an understanding of management's procedures for identifying subsequent events, inquiring of management and those charged with governance, reading minutes and the latest interim financial statements, and obtaining written representations. Re-performing prior year work or blanket confirmations are not required, and representations alone are insufficient.

Did you get it right without looking?

One question tells you little. A timed set on Subsequent events and going concern shows your real accuracy, how long you take and where you lose marks.

Practise Subsequent events and going concernFree diagnostic mock

More Subsequent events and going concern questions