AUDITING
SUBSEQUENT EVENTS (BSA-560)
Lecture # 17
International Accounting Standard (IAS) 10, “Events after the Balance Sheet Date,” deals with the
treatment in financial statements of events, both favorable and unfavorable, that occur between the
date of the financial statements and the date when the financial statements are authorized for issue
and identifies two types of events:
(a) Those that provide evidence of conditions that existed at the date of the financial statements;
and
(b) Those that are indicative of conditions that arose after the date of the financial statements
Definition:
Date of the financial statements is the date of the end of the latest period covered by the financial
statements, which is normally the date of the most recent balance sheet in the financial statements
subject to audit.
Date of approval of the financial statements is the date on which those with the recognized
authority assert that they have prepared the entity’s complete set of financial statements, including
the related notes, and that they have taken responsibility for them. In some jurisdictions, the law or
regulation identifies the individuals or bodies (for example, the directors) that are responsible for
concluding that a complete set of financial statements has been prepared, and specifies the
necessary approval process.
Date of the auditor’s report is the date selected by the auditor to date the report on the financial
statements. The auditor’s report is not dated earlier than the date on which the auditor has obtained
