FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
19th Edition
ISBN: 9781119493624
Author: Kimmel
Publisher: WILEY
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Subsequent Events and Subsequently Discovered Facts. Michael Ewing is auditing the financial statements of Dallas Company for the year ended December 31, 2017. In concluding the process of gathering sufficient appropriate evidence, Ewing has asked to meet with his supervisor on the audit (John Ross) to discuss responsibility for events occurring afterthe date of the financial statements.Required:a. What is a subsequent event? During what time period is Ewing responsible for subsequent events?b. List some procedures that Ewing may perform to assist him in identifying subsequent events.c. What are two types of subsequent events? How should information related to these types of subsequent events be reflected in Dallas’s financial statements?d. Assume that on January 8, 2018, Dallas Company agreed to acquire Houston Inc. in a significant transaction. The date of Ewing’s report was February 7, 2018, and Dallas issued its financial statements (and Ewing’s reports on its financial statements…
Your audit team is reviewing the third quarter financial statements of Smirks, Inc., a publicly traded company. The audit manager, Jason, thinks the client may have omitted an important item and has asked you to research whether interim financial statements are required to include earnings per share amounts. Prepare an email responding to Jason’s question. Comment on any other potential ramifications of Smirks, Inc.’s omission that come to mind, which you can offer to research. Please draft one email. Thank you.
You are the auditor of Banku Ltd. While conducting the audit of the company for the year ended 31 December 2017, you wanted to refer to the minutes book but the Board of Directors refused to give these books to you. Required: Discuss the implications of the directors’ action.
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