If you find it difficult to answer the questions then read our free summary of ISA 560 – Subsequent Events
1. Application of Audit procedures for the purpose of identifying subsequent events is __________ dependent
[tippy title=”Estimation” width=”300″]Wrong!
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[tippy title=”Information” width=”300″]Correct!
[/tippy]
[tippy title=”Time” width=”300″]Wrong!
[/tippy]
[tippy title=”Judgment” width=”300″]Wrong!
[/tippy]
2. Amended auditor’s date must be dated not:
[tippy title=”later than amended financial statements are approved” width=”300″]Wrong!
[/tippy]
[tippy title=”earlier than amended financial statements are approved” width=”300″]Correct!
[/tippy]
[tippy title=”later than original financial statements are approved” width=”300″]Wrong!
[/tippy]
[tippy title=”earlier than original financial statements are approved” width=”300″]Wrong!
[/tippy]
3. Which of the following is in a correct order?
[tippy title=”Date of auditor’s report > Date of financial statements approval > Date of financial statements > Date of financial statements publication” width=”300″]Wrong!
[/tippy]
[tippy title=”Date of auditor’s report > Date of financial statements > Date of financial statements approval > Date of financial statements publication” width=”300″]Wrong!
[/tippy]
[tippy title=”Date of financial statements > Date financial statements are approved > Date of auditor’s report > Date financial statements are published” width=”300″]Wrong!
[/tippy]
[tippy title=”Date of financial statements > Date of approval of financial statements > Date of auditor’s report > Date financial statements are published” width=”300″]Correct!
[/tippy]
4. As per ISA 560 Subsequent Events, auditor is required to make sure that such events are identified which:
[tippy title=”occurred in this period” width=”300″]Wrong!
[/tippy]
[tippy title=”occurred in this period irrespective of adjustments” width=”300″]Wrong!
[/tippy]
[tippy title=”Occured in this period and required adjustments or disclosures” width=”300″]Correct!
[/tippy]
5. Auditor is duty bound to identify subsequent events after even after signing auditor’s report but not after the financial statements are published
[tippy title=”True” width=”300″]Wrong!
Auditor is responsible to apply procedures to identify subsequent events only up to the date auditor’s report is issued[/tippy]
[tippy title=”False” width=”300″]Correct!
[/tippy]
6. Which of the following is correct?
[tippy title=”Auditor has a continuing responsibility towards events occurring after auditor’s report” width=”300″]Wrong!
[/tippy]
[tippy title=”Before financial statements are published auditor becomes aware of the fact which if it were known had the auditor issued a different auditor’s report then he must carry out additional procedures” width=”300″]Correct
[/tippy]
[tippy title=”After the auditor’s report is issued auditor has no continuing responsibility even if the fact is of nature had it known before report is issued auditor might had issued a different report” width=”300″]Wrong!
[/tippy]
[tippy title=”After the balance sheet until the new auditor is appointed, current auditor is responsible for all the events occurered” width=”300″]Wrong!
[/tippy]
7. Subsequent events are events that occur:
[Multiple options are correct]
[tippy title=”after auditor’s report” width=”300″]Correct!
Test of details help identify unusual transaction and frequent reversals as they are often a way to hide up fraudulent activities[/tippy]
[tippy title=”after balance sheet date” width=”300″]Wrong!
[/tippy]
[tippy title=”after financial statements are published” width=”300″]Wrong!
[/tippy]
[tippy title=”Between the balance sheet date and auditor’s report” width=”300″]Correct!
[/tippy]
[tippy title=”until the next auditor is appointed” width=”300″]Wrong!
[/tippy]
8. Management may disagree to amend financial statements if applicable laws and regulations of the relevant jurisdictions do not prohibit management from restricting amendments in financial statements
[tippy title=”True” width=”300″]Correct!
[/tippy]
[tippy title=”False” width=”300″]Wrong!
[/tippy]