The bookkeeper of a company you are auditing states, Our balance sheet is dated December 31, the

Question:

The bookkeeper of a company you are auditing states, “Our is dated December 31, the end of our accounting period. I don’t understand loss contingencies and subsequent events. Also, I see no reason for disclosing these items on the company’s because they deal with events that might occur or have occurred after the date.”

Required
Write a short report to the bookkeeper that explains loss contingencies and subsequent events, as well as the importance of their disclosure on the company’s Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...