Question

Subsequent events for which the auditor has a responsibility to actively search are defined as events that occur subsequent to the

a. Balance sheet date.
b. Date of the auditor's report.
c. Balance sheet date but prior to the date of the auditor's report.
d. Date of the auditor's report and concern contingencies that are not reflected in the financial statements.

Answer 1

The auditor has a responsibility to actively search for subsequent events that occur between the balance sheet date and the date of the auditor's report.

Step-by-step explanation:

The correct answer is c. Balance sheet date but before the date of the auditor's report.

Subsequent events refer to events that occur after the balance sheet date but before the date of the auditor's report. These events may have a significant impact on the financial statements and require the auditor's attention. The auditor has a responsibility to actively search for subsequent events that could affect the financial statements and assess their impact on the financial statements.

For example, if a company's balance sheet date is December 31 and the auditor's report is issued on February 15, subsequent events that occur between December 31 and February 15 are considered for evaluation.