When a Subsequent Event Provides Evidence About Conditions That Existed

question 21

Multiple Choice

When a subsequent event provides evidence about conditions that existed at the balance sheet date,what is the best course of action for the auditor to follow?

• A)Assign a specialist.
• B)Ensure that the financial statements are adjusted to reflect the information,including any necessary footnote disclosures.
• C)Shop for an opinion that fits the desired type of event.
• D)Provide management with a new engagement letter to document the terms of the revised arrangement.

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Definitions:

DJIA

Dow Jones Industrial Average, a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.

Lloyds of London

A British insurance and reinsurance market, where members join together as syndicates to insure and spread risks.

FDIC

The Federal Deposit Insurance Corporation, a U.S. government agency insuring deposits in banks and thrift institutions, offering depositors protection against bank failure.

CFTC

The Commodity Futures Trading Commission, a United States federal agency regulating futures and options markets.