Abstract
Subsequent events, called so because they are recorded after the closing date of financial year, must be recorded and taken into account in drawing up the financial statements. Some of them can fundamentally changing financial position of the entity or provide information to users absolutely necessary for their decisions. Accounting treatment in this situation is provided for by International Standard of Accounting ISA 10 “Events after the Reporting Period”, whose provisions are taken to a large extent in national accounting standards. For financial auditor, investigating how the subsequent events are presented in the financial statements shall constitute a procedural obligation. Auditor`s procedure is based on the provisions of an specific International Standard on Auditing, ISA 560 “Subsequent events”. He shall be required to satisfy itself that in the financial statements shall be presented all treatment and appropriate information concerning subsequent events.
Highlights
From an accounting point of view, the treatment of subsequent events is provided for by International Accounting Standard IAS 10 “Events after the Reporting Period”
The objective of standard is to prescribe when an entity should adjust its financial statements for subsequent balance sheet date events and presentation of information which should be an entity with regard to the date on which it has been authorized publication of financial statements with respect to the events after the balance sheet date
Direct consequence is that an entity should not be to draw up financial statements on the basis of assumptions concerning business continuity if subsequent events indicates that this assumption in not suitable
Summary
From an accounting point of view, the treatment of subsequent events is provided for by International Accounting Standard IAS 10 “Events after the Reporting Period”. Direct consequence is that an entity should not be to draw up financial statements on the basis of assumptions concerning business continuity if subsequent events indicates that this assumption in not suitable. Subsequent events are those events, both favorable and unfavorable, which occur between balance sheet date and the date on which it has authorized its publication financial statements. Those which provide information on conditions that may arise after the date of balance sheet (subsequent events that does not lead to an adjustment of financial statements). Events which call into question a problem concerning business continuity
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