AUDITING STANDARD ASA 560AUDITING STANDARD ASA 560

AUDITING STANDARD ASA 560

Subsequent Events

Application

1 This Auditing Standard applies to:

(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with Part 2M.3 of the Corporations Act 2001; and

(b) an audit of a financial report for any other purpose.

2 This Auditing Standard also applies, as appropriate, to an audit of other financial information.

Operative Date

3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 July 2006.

Introduction

4 The purpose of this Auditing Standard is to establish mandatory requirements and to provide explanatory guidance on the auditor’s responsibility regarding subsequent events. In this Auditing Standard, the term “subsequent events” is used to refer to both events occurring between the reporting date and the date of the auditor’s report, and facts discovered after the date of the auditor’s report.

5 The auditor shall consider the effect of subsequent events on the financial report and on the auditor’s report.

6 Australian Accounting Standard AASB 110 Events After the Balance Sheet Date deals with the treatment in a financial report of events, both favourable and unfavourable, that occur between the reporting date and the date when the financial report is authorised for issue and identifies two types of events:

(a) those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); or

(b) those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting date).

Definitions

7 The following terms have the meanings attributed below:

(a) “Reporting date” means the date of the end of the latest period covered by the financial report, which is normally the date of the most recent balance sheet in the financial report subject to audit.

(b) “Date of approval of the financial report” means the date on which those with the recognised authority assert that they have prepared the entity’s complete financial report, including the related notes, and that they have taken responsibility for the financial report.

In some jurisdictions, law or regulation identifies the individuals or bodies (for example, the directors) that are responsible for concluding that a complete financial report has been prepared, and specifies the necessary approval process. In other jurisdictions, the approval process is not prescribed in law or regulation and the entity follows its own procedures in preparing and finalising its financial report in view of its management and governance structures. In some jurisdictions, final approval of the financial report by shareholders is required before the financial report is issued publicly. In these jurisdictions, final approval by shareholders is not necessary for the auditor to conclude that sufficient appropriate audit evidence has been obtained. The date of approval of the financial report for purposes of the Auditing Standards is the earlier date on which those with the recognised authority determine that a complete financial report has been prepared.