Procedures generally carried out to complete the audit: 1.

Identifying subsequent events that may affect the financial statements under audit 2. Identifying contingencies such as litigation, claims and assessment 3. Obtaining written management representation 4. Performing wrap-up procedures SUBSEQUENT EVENTS - Events or transactions that occur subsequent to the balance sheet date that may affect the financial statement Classifications of Subsequent Events: 1. Requiring Adjustment 2. Requiring Disclosure Subsequent Events Requiring Adjustment - Those that provide further evidence of conditions that existed at the balance sheet date o Settlement of litigation in excess of the recorded liability o Loss on uncollectible receivables as a result of customers deteriorating financial condition Subsequent Events Requiring Disclosure - Those that are indicative of conditions that arose subsequent to the balance sheet date. o Issuance of stocks or bonds after the balance sheet date o Loss on inventory due to fire that occurred in the subsequent period o Loss on uncollectible receivable because of a major casualty suffered by that customer after the balance sheet date

PSA 560 The auditor should perform procedures designed to obtain sufficient appropriate evidence that all events up to the date of the auditors report that may require adjustment of, or disclosure in, the financial statements have been identified. Procedures to Identify Subsequent Events - Inquiring of management about subsequent events - Reviewing procedures management has established to identify subsequent events - Reviewing the minutes of board of directors and stockholders meetings - Reading the latest available interim financial statements - Inquiring of the entitys lawyers concerning litigation, claims, and assessments Subsequent events occurring after the report date but before the financial statements are issued

The auditor does not have any responsibility to perform procedures to identify subsequent events occurring after the date of the auditors report.

Effect of Subsequent Events on the Date of the Report - The responsibility to inform the auditor of facts which may affect the financial statements rests with management. - Material subsequent event requiring adjustment o The financial statements should be adjusted and the auditors report should bear the original date of the report. - Subsequent event requiring disclosure o The auditor should consider the adequacy of disclosure and should date the report as of the date of the subsequent event

LITIGATIONS, CLAIMS, AND ASSESSMENT PSA 501 Requires the auditor to carry out procedures in order to become aware of any litigation and claims involving the entity which may have a material effect on the financial statements. Management - Primary source of information about litigation, claims and assessment Management Gives information Auditor Corroborates the information (Letters of Inquiry)

Effect of refusal of management to give information - The auditor will issue either a qualified or disclaimer of opinion