Subsequent Events
Financial Dictionary — Auditing
Definition
Material event that occurs after the end of the accounting period and before the publication of a Financial Statements of entity. Such events are disclosed in the notes to the financial statements. Also referred to Post Balance Sheet Events
Detailed Explanation
Material event that occurs after the end of the accounting period and before the publication of a Financial Statements of entity. Such events are disclosed in the notes to the financial statements. Also referred to Post Balance Sheet Events.
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.