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ACCA考试《审计与认证业务F8》知识点(3)

来源：高顿网校 2015-03-27

　　RELEVANT TO ACCA QUALIFICATION PAPER F8

　　Subsequent events

　　Students of financial reporting and auditing papers will have to gain an

　　understanding of how subsequent events （also known as ‘events after the

　　reporting period’） affect the financial statements of an entity. This article will

　　consider the financial reporting aspects concerning subsequent events using a

　　case study type scenario, and will then discuss the auditing requirements that

　　candidates of Paper F8, Audit and Assurance need to be aware of.

　　Financial reporting considerations

　　In almost all circumstances, financial statements will not be finalised until a

　　period of time has elapsed between the year-end date and the date on which

　　the financial statements are （expected to be） issued. Therefore, regard has to

　　be given to events that occur between the reporting date and the date on which

　　the financial statements are （expected to be） authorised for issue.

　　IAS 10, Events After the Reporting Period stipulates the accounting and

　　disclosure requirements concerning transactions and events that occur

　　between the reporting date and the （expected） date of approval of the financial

　　statements. Among other things, IAS 10 determines when an event that occurs

　　after the reporting date will result in the financial statements being adjusted,

　　or where such events merely require disclosure within the financial statements.

　　Such events are referred to in IAS 10 as ‘adjusting’ or ‘non-adjusting’ events.

　　Students who have studied Paper F3, Financial Accounting will have come

　　across such terminology and it is imperative that they can differentiate

　　between an adjusting and a non-adjusting event. IAS 10 prescribes the

　　definitions of such events as follows:

　　Adjusting event

　　An event after the reporting period that provides further evidence of conditions that

　　existed at the end of the reporting period, including an event that indicates that the

　　going concern assumption in relation to the whole or part of the enterprise is not

　　appropriate.1

　　Non-adjusting event

　　An event after the reporting period that is indicative of a condition that arose after the

　　end of the reporting period.1

　　Example 1

　　You are the trainee accountant of Gabriella Enterprises Co and are preparing

　　the financial statements for the year-ended 30 September 2010. The financial

　　statements are expected to be approved in the Annual General Meeting, which

　　SUBSEQUENT EVENTS

　　APRIL 2011

　　is to be held on Monday 29 November 2010. Today’s date is 22 November

　　2010. You have been made aware of the following matters:

　　1. On 14 October 2010, a material fraud was discovered by the

　　bookkeeper. The payables ledger assistant had been diverting funds into

　　a fictitious supplier bank account, set up by the employee, which had

　　been occurring for the past six months. The employee was immediately

　　dismissed, legal proceedings against the employee have been initiated

　　and the employee’s final wages have been withheld as

　　part-reimbursement back to the company.

　　2. On 20 September 2010, a customer initiated legal proceedings against

　　the company in relation to a breach of contract. On 29 September 2010,

　　the company’s legal advisers informed the directors that it was unlikely

　　the company would be found liable; therefore no provision has been

　　made in the financial statements, but disclosure as a contingent liability

　　has been made. On 29 October 2010, the court found the company

　　liable on a technicality and is now required to pay damages amounting

　　to a material sum.

　　3. On 19 November 2010, a customer ceased trading due to financial

　　difficulties owing $2,500. As the financial statements are needed for the

　　board meeting on 22 November 2010, you have decided that because

　　the amount is immaterial, no adjustment is required. The auditors have

　　also confirmed that this amount is immaterial to the draft financial

　　statements.

　　Required:

　　（a） For each of the three events above, you are required to discuss whether the

　　financial statements require amendment.

　　Answer:

　　When presented with such scenarios, it is important to be alert to the timing of

　　the events in relation to the reporting date and to consider whether the events

　　existed at the year-end, or not. If the conditions did exist at the year-end, the

　　event will become an adjusting event. If the event occurred after the year-end, it

　　will become a non-adjusting event and may simply require disclosure within the

　　financial statements.1. Fraud

　　Clearly the fraud committed by the payables ledger clerk has been ongoing

　　during, and beyond the financial year. Fraud, error and other irregularities that

　　occur prior to the year-end date – but which are only discovered after the yearend

　　– are adjusting items, and therefore the financial statements would require

　　amendment to take account of the fraudulent activity up to the year-end.

　　SUBSEQUENT EVENTS

　　APRIL 2011

　　2. Legal proceedings

　　At the year-end, the company had made disclosure of a contingent liability.

　　However, subsequent to the year-end （29 October 2010）， the court found the

　　company liable for breach of contract. The legal proceedings were issued on

　　20 September 2010 （some 10 days before the year-end）。 This is, therefore,

　　evidence of conditions that existed at the year-end. IAS 10 requires the result

　　of a court case after the reporting date to be taken into consideration to

　　determine whether a provision should be recognised in accordance with IAS

　　37, Provisions, Contingent Liabilities and Contingent Assets at the year-end. In

　　this case, the financial statements will require adjusting because:

　　? the conditions existed at the year-end

　　? the recognition criteria for a provision in accordance with IAS 37 have

　　been met.

　　3. Loss of customer

　　A customer ceasing to trade so soon after the reporting period indicates nonrecoverability

　　of a receivable at the reporting date and therefore represents an

　　adjusting event under IAS 10, Events After the Reporting Period. Assets should

　　not be carried in the statement of financial position at any more than their

　　recoverable amount and, therefore, an allowance for receivables should be

　　made.

　　Auditor’s responsibilities

　　So far we have considered the financial reporting aspects relating to events

　　after the reporting period. The second part of this article will now consider the

　　auditor’s responsibility in relation to ensuring all events occurring between the

　　reporting date and the （expected） date of the auditor’s report have been

　　adequately taken into consideration, and sufficient appropriate audit evidence

　　has been gathered to achieve the objective. It is important that where students

　　have studied Paper F3, Financial Accounting, knowledge of accounting

　　standards such as IAS 10 is not set aside or forgotten when it comes to papers

　　such as Paper F8, Audit and Assurance. There is a very close relationship

　　between accounting standards and auditing standards.

　　ISA 560, Subsequent Events outlines the auditor’s responsibility in relation to

　　subsequent events. For the purposes of ISA 560, subsequent events are those

　　events that occur between the reporting date and the date of approval of the

　　financial statements and the signing of the auditor’s report.

　　The overall objective of ISA 560 is to ensure the auditor performs audit

　　procedures that are designed to obtain sufficient appropriate audit evidence to

　　give reasonable assurance that all events up to the （expected） date of the

　　auditor’s report have been identified, properly accounted for/r disclosed in the

　　financial statements.

　　SUBSEQUENT EVENTS

　　APRIL 2011

　　ISA 560 also covers events that are discovered by the auditor after the date of

　　the auditor’s report but before the financial statements are issued.

　　Audit procedures

　　In Example 1 above, we identified that fraud and the legal proceedings were

　　adjusting events that gave rise to an adjustment within the financial statements

　　as at 30 September 2010. We also identified that the loss of the customer was

　　also an adjusting event, but as the value of the receivable was considered

　　immaterial, no adjustment was made to the financial statements. Let us

　　expand on the requirement in Example 1 as follows:

　　Required:

　　（b） Describe the audit procedures that should be performed to obtain

　　sufficient appropriate evidence that the subsequent events have been

　　appropriately treated in the financial statements.

　　Answer:

　　Candidates who are faced with scenarios such as those in Example 1 should

　　think about the information needed that would prompt an accountant or

　　finance director to go back to the year-end and retrospectively amend the

　　financial statements. You could interpret the question as asking ‘what

　　information would I need in real-life to justify a provision or disclosure within

　　the financial statements before making such provision or disclosure?’ Where

　　candidates have studied Paper F3 and have knowledge of IAS 10, thinking

　　about the provisions contained in this IAS 10 will often lead you into thinking

　　about the audit evidence you would need to satisfy yourself that the

　　requirements in IAS 10 have been met, as well as offering ideas as to how you

　　would go about obtaining this evidence for the audit file.

　　Fraud

　　Fraud risk factors are covered in ISA 240, The Auditor’s Responsibilities Relating

　　to Fraud in an Audit of Financial Statements. The fact that fraud has occurred at

　　Gabriella Enterprises Co will increase the risk of material misstatement due to

　　fraud.

　　The audit procedures to be performed to ensure the fraud has been correctly

　　accounted for in the financial statements may include:

　　? Recalculation of the amounts involved.

　　? Discussions with management as to how such a fraud occurred and why

　　it took six months’ to discover the fraud （controls should prevent, detect

　　and correct material misstatements on a timely basis）。

　　? Establishing how the bookkeeper discovered the fraud and what controls

　　（if any） contain weaknesses to allow the employee to commit the fraud.

　　SUBSEQUENT EVENTS

　　APRIL 2011

　　Note that employee fraud usually involves the manipulation of controls,

　　whereas management fraud often involves the overriding of controls.

　　? Performing substantive procedures on journal entries （particularly those

　　close to, or at, the year-end）。

　　? Confirming directly with suppliers the account activity for the period

　　under audit.

　　? Reviewing the purchase invoices and being on alert for any ‘doctored’ or

　　‘copy’ invoices and making enquiries as to their authenticity.

　　? A review of human resources files for evidence of disciplinary

　　proceedings taken against the employee. This will also confirm

　　compliance with laws and regulations, particularly in relation to

　　employment legislation and the withholding of monies.

　　? Testing of other controls to identify other weaknesses that may indicate

　　employee or management fraud.

　　? Obtaining written representations from management concerning the

　　fraud.

　　? Test checking after-date cash for evidence of reimbursements by the

　　employee, such as the withheld wages/salaries by the entity.

　　? Discussions with the entity’s legal advisers as to the possibility of

　　reimbursement of the balance of the misappropriated funds.　Legal proceedings

　　? Obtaining a copy of the court order or other correspondence confirming

　　the company has been found liable to pay compensation to its customer.

　　? Test checking after-date cash to confirm payment to the customer.

　　? Ensuring a provision has been recognised as opposed to disclosure as a

　　contingent liability to meet the requirements in IAS 37, Provisions,

　　Contingent Liabilities and Contingent Assets.

　　? Ensuring the provision is reasonable in relation to the outcome of the

　　court case.

　　? Obtaining written representation from management to confirm the

　　treatment of the provision.

　　Loss of customer

　　? Discuss with management the reason for not adjusting the irrecoverable

　　receivable.

　　? The auditors have already agreed this amount is immaterial to the

　　financial statements, so this amount would be put on an ‘audit error

　　schedule’。 Provided this amount remains immaterial at the completion

　　stage, both individually and when aggregated with other misstatements,

　　the auditor can still express an unmodified opinion.

　　Financial statements amended after the date of the auditor’s report, but

　　before the financial statements are issued.

　　SUBSEQUENT EVENTS

　　APRIL 2011

　　Circumstances may arise when the auditor becomes aware of facts that may

　　materially affect the financial statements and, in such situations, the auditor

　　will consider whether the financial statements need amending. The auditor is

　　required to discuss with management how they intend to deal with events that

　　will require the financial statements to be amended after the auditors have

　　signed their report, but before the financial statements are issued.

　　Where the financial statements are amended, the auditor is required to carry

　　out necessary audit procedures in light of the circumstances giving rise to the

　　amendment. The auditor will also be required to issue a new auditor’s report

　　on the amended financial statements and, therefore, must extend their

　　subsequent events testing up to the （expected） date of the new auditor’s

　　report. The revised auditor’s report must not be dated any earlier than the date

　　of the amended financial statements. In situations where management refuses

　　to make amendments to the financial statements, the auditor must take all

　　steps required to avoid reliance by third parties on the auditor’s report. The

　　auditor should also consider the need to resign from the audit.

　　Conclusion

　　Subsequent events are a key examinable area in auditing papers and it is

　　crucial that students have an understanding of the types of audit evidence that

　　the auditor should obtain to confirm that the accounting and disclosure

　　requirements （particularly in IAS 10） have been applied correctly within the

　　financial statements.

　　Candidates who simply write ‘obtain a management representation’ cannot

　　expect to pass a question on subsequent events because written

　　representations, on their own, are not a substitute for alternative audit

　　evidence. Where candidates have knowledge of IAS 10 through studying Paper

　　F3, you should not be afraid to think about the accounting requirements in

　　order to help you consider how you will obtain sufficient appropriate audit

　　evidence to achieve the auditing objectives. However, sticking to the question

　　requirement is vital. If you are asked about the types of procedure（s） you

　　should perform in determining whether the accounting treatment has been

　　correctly applied, this is exactly what you must do.

　　Candidates should take care not to digress into irrelevant areas by writing

　　everything they know about IAS 10, and instead should just answer the

　　question set by the examiner.

　　Steve Collings is assessor for Paper F8

　　Reference

　　1. IAS 10, Events After the Reporting Date, Paragraph 3.

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