Events Occurring Up to the Date of the AEvents Occurring Up to the Date of the Auditor’s Report

Events Occurring Up to the Date of the Auditor’s Report

8 The auditor shall perform audit procedures designed to obtain sufficient appropriate audit evidence that all events up to the date of the auditor’s report that may require adjustment of, or disclosure in, the financial report have been identified.

9 These audit procedures are in addition to routine audit procedures which may be applied to specific transactions occurring after the reporting date to obtain audit evidence as to account balances as at the reporting date, for example, the testing of inventory cut-off and payments to creditors. The auditor is not, however, expected to conduct a continuing review of all matters to which previously applied audit procedures have provided satisfactory conclusions.

10 The audit procedures to identify events that may require adjustment of, or disclosure in, the financial report would ordinarily be performed as near as practicable to the date of the auditor’s report and ordinarily include the following:

• reviewing procedures management has established to ensure that subsequent events are identified;
• reading minutes of the meetings of shareholders, those charged with governance, audit and executive committees held after the reporting date and enquiring about matters discussed at meetings for which minutes are not yet available;
• reading the entity’s latest available interim financial report and, as ordinarily considered necessary and appropriate, budgets, cash flow forecasts and other related management reports;
• enquiring, or extending previous oral or written enquiries, of the entity’s lawyers concerning litigation and claims; and
• enquiring of management as to whether any subsequent events have occurred which might affect the financial report. Examples of enquiries of management on specific matters include:

♦ the current status of items that were accounted for on the basis of preliminary or inconclusive data;

♦ whether new commitments, borrowings or guarantees have been entered into;

♦ whether sales of assets have occurred or are planned;

♦ whether the issue of new shares or debentures or an agreement to merge or liquidate has been made or is planned;

♦ whether any assets have been appropriated by government or destroyed, for example, by fire or flood;

♦ whether there have been any developments regarding risk areas and contingencies;

♦ whether any unusual accounting adjustments have been made or are contemplated; and

♦ whether any events have occurred or are likely to occur which will bring into question the appropriateness of accounting policies used in the financial report, as would be the case, for example, if such events call into question the validity of the going concern assumption.