Subsequent Happenings and Events - Auditing
dThe auditor must
perform auditing processes designed to obtain sufficient audit proof that all event up to the date of the auditor’s
report that may require adjustment in the financial
statements have been identified. The auditor is not, however, expected
to conduct a detailed continuing review of all matters which might be previously
used or applied, and auditing processes have provided satisfactory conclusions.
The auditing processes help in identification of the happenings
that might require
adjustment and the statements related to financial matters,
would be carried out as near and practically possible to the date of
the auditor’s
report and generally include the following.
Reviewing processes that the managerial personell has established to
ensure all happenings after the closing of financial years are identified.
Inspecting the records, such as the minutes and day book of
the board of directors, gatherings of
share-holders and the audit and executive meetings held after the
particular balance-sheet date and enquiring about the happenings and
matters discussed for which minutes are yet to be prepared.
Reading the component's latest available interim
statements relating to financial matters, as and where it is considered
necessary, budgets, cash inflows and outflows forecast and internal
reports of audit .
Interacting verbally or in written form with the
entity’s advocates about the status of the legal cases in which
the component is
involved.
Lastly interacting with the managerial personell as to whether any
happenings after the closing of financial year have occurred which
significantly affect the financial
statements.
When any component of the entity has been audited by another auditor,
the main auditor must make similar enquires with the other auditor
as stated above in respect of the component audited by the other
auditor.
When the auditor becomes aware of happenings which significantly affect the
statements relating to financial matters, the auditor should consider whether such happening are
properly recorded and accounted for in the particular statements. When the managerial personell
does not record such happenings that the auditor believed should be
accounted for, the auditor should present a conclusive opinion or an
adverse opinion as may be considered correct.