A subsequent event is one that occurs after the date of the financial statements (i e , December 31, 2013) but prior to the auditor having dated (or possibly issued) the audit report (i e , March 15, 2014) One type of subsequent event is where additional evidence becomes available before the statem...

If the auditor is aware of a subsequent event that would change the readers or investors mind about ...

A subsequent event is one that occurs after the date of the financial statements (i.e., December 31,

Question:

A subsequent event is one that occurs after the date of the (i.e., December 31, 2013) but prior to the auditor having dated (or possibly issued) the (i.e., March 15, 2014). One type of subsequent event is where additional evidence becomes available before the statements have been issued that sheds light on certain estimates previously made in the statements. A good example is additional evidence about the collectability of a receivable that relates to its valuation in the December 31, 2013, but is not uncovered until January 31, 2014. Why is it important from an auditing perspective that an auditor be required to adjust the financial statement amounts for some material subsequent events? If an auditor fails to live up to this standard, what is the potential liability exposure for the auditor?

Audit Report
The audit report is issued by a certified public accountant who is appointed by the shareholders to provide assurance upon the truth and fairness of the financial statements prepared by the managers of the company. Audit report contains the... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...