Question

If the balance sheet of a private company is dated December 31, 2016, the audit report is dated February 8, 2017, and both are released on February 15, 2017, this indicates that the auditor has searched for subsequent events that occurred up to?

1) December 31, 2016.
2) January 1, 2017.
3) February 8, 2017.
4) February 15, 2017.

Answer 1

The auditor is responsible for identifying subsequent events up to February 8, 2017, as that is the date of the audit report. The release date of the documents does not affect the auditor's responsibility.

Step-by-step explanation:

The auditor's responsibility is to search for and evaluate subsequent events that could have a significant effect on the financial statements. In this case, since the auditor's report is dated February 8, 2017, it indicates that the auditor has looked for subsequent events up to this date. The balance sheet dated December 31, 2016, reflects the financial position as of that date, and the responsibility of the auditor is to consider subsequent events that might impact the financial statements up until the date of the audit report. Since both the balance sheet and the audit report are released on February 15, 2017, it does not affect the date up to which the auditor is responsible for identifying subsequent events, which remains February 8, 2017. Therefore, the correct answer to the question is 3) February 8, 2017.