Subsequent events
Financial Dictionary — Auditing Standards
Definition
Events occurring after the reporting period that may require adjustment or disclosure.
Detailed Explanation
Subsequent events are events occurring after the reporting period that may require adjustment or disclosure in the financial statements.
Common Uses
- Used in audit planning to understand risks and design procedures.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
Practical Example
- Example: The auditor references **Subsequent events** when designing procedures and documenting conclusions in the audit file.
Why This Term Matters
- Why it matters: Supports high-quality, defensible audit conclusions and helps detect material misstatements and control weaknesses.