Question

Subsequent events refer to_________.

A. Events occurring between the date of the financial statements and the date of the auditor's report.
B. Events occurring before the financial statement date.
C. Events occurring after the financial statement date.
D. Events occurring after completion of the audit and issuance of the audit report.

Answer 1

Subsequent events are events occurring between the date of the financial statements and the auditor's report date. They are critical for auditors to consider as they may have a significant impact on the financial statements. The correct answer is A: Events occurring between the date of the financial statements and the date of the auditor's report.

Step-by-step explanation:

Subsequent events refer to events occurring between the date of the financial statements and the date of the auditor's report. These events are significant because they can provide further evidence about conditions that existed at the date of the financial statements or provide information about conditions that arose subsequent to that date.

The correct answer is A: Events occurring between the date of the financial statements and the date of the auditor's report. It is important for auditors to consider these events as they may affect the fairness and accuracy of the financial statements and, therefore, may require adjustment or disclosure in the financial statements.