BU477 Chapter Notes - Chapter 18: Internal Control, Capital Structure, Contingent Liability
Document Summary
There is a potential future payment to an outside party or the impairment of an asset that resulted from an existing condition: 2. There is uncertainty about the amount of the future payment or impairment; and: 3. The outcome will be resolved by some future event or events. If management does not disclose these claims, auditors have no way of finding out about it. Types of subsequent events: two types of subsequent events require consideration by management and evaluation by the auditor, 1. Those that have a direct effect on the financial statements and require adjustment: 2. Date: emphasis in the review should be on, 1. Changes in the business relative to results for the same period in the year under audit: 2. This provides written documentation of client representations in the event of disagreement or a lawsuit between the auditor and the client: consider other information in annual reports, other information in the annual report.
