Question

Specific audit procedures to identify subsequent events include_____________.

A. Obtaining an understanding of how management identifies subsequent events.
B. Reading the client's subsequent interim financial statements, if available, and other data such as budgets and cash flow forecasts.
C. Inquiring of the client's legal counsel regarding litigation, claims, and assessments.
D. All of these answer choices are correct.

Answer 1

To identify subsequent events, an auditor should understand management's process of detection, read any interim financial statements available, and inquire about legal matters with the client's counsel. All the listed options are correct audit procedures.

Step-by-step explanation:

The specific audit procedures to identify subsequent events include:

Obtaining an understanding of how management identifies subsequent events.

Reading the client's subsequent interim financial statements, if available, and other data such as budgets and cash flow forecasts.

Inquiring of the client's legal counsel regarding litigation, claims, and assessments.

All of these answer choices are correct.

Sophisticated procedures including communication with management, examining interim financials, and consulting with legal experts are imperative to detect any events that might affect the financial statements after the reporting period.

correct option B.) Reading the client's subsequent interim financial statements, if available, and other data such as budgets and cash flow forecasts.