Subsequent events

In this lesson

1. 0:00 Completion and review overview
2. 1:00 Adjusting events explained
3. 3:02 Non-adjusting events and disclosure
4. 4:04 Subsequent events timeline
5. 6:10 Active and passive audit duties
6. 7:07 Procedures for subsequent events review
7. 12:02 Lloyd Coe case study analysis

About this lesson

You'll discover the critical distinction between adjusting events (which require financial statement amendments) and non-adjusting events (which need disclosure if material), and understand why this matters for your audit opinion. The lesson walks you through the practical framework auditors use to detect subsequent events between year end and audit report issuance. You'll explore key procedures including reviewing post-year-end management accounts, board minutes, and legal correspondence, plus obtaining written representations from management. The session clarifies your active duty during the audit period to actively search for material events, and your more passive responsibility after the audit report is signed but before financial statements are issued. A detailed worked example brings this to life: you'll work through a scenario involving a receivable insolvency discovered after year end, learning how to assess whether an adjustment is necessary, what procedures to perform, and how to determine the impact on your audit opinion. This practical application shows you exactly how subsequent events testing protects financial statement users and demonstrates why this completion procedure is essential for every audit.

Duration: 16m