Question

In regard to subsequent facts, the auditor _______.

A) Has no responsibility
B) Is responsible for making reasonable efforts to detect any material subsequent facts
C) Is responsible for making reasonable efforts to detect any immaterial subsequent facts
D) Is only responsible for material events occurring before the balance sheet date.

Answer 1

The auditor is only responsible for material events occurring before the balance sheet date.

Step-by-step explanation:

In regard to subsequent facts, the auditor is only responsible for material events occurring before the balance sheet date.

Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are issued or available to be issued. The auditor's responsibility is to assess whether these subsequent events have a material impact on the financial statements.

For example, if a company's balance sheet is dated December 31 and the auditor completes the audit in January, any events that occur after December 31 would be subsequent events. However, the auditor is only responsible for events or transactions that are material and have a significant impact on the financial statements.