Harvey, CPA, is preparing an audit program for the purpose of ascertaining the occurrence of subsequent events that may require adjustment or disclosure essential to a fair presentation of the financial statements in conformity with applicable accounting standards.Which one of the following procedures would be LEAST appropriate for this purpose?
A) Confirm, as of the completion of fieldwork, accounts receivable that have increased significantly from the year-end date.
B) Inquire of management concerning events that may have occurred.
C) Read the minutes of the board of directors meetings.
D) Obtain a legal counsel's letter as of the completion of fieldwork.

Question

Quizplus · Accepted Answer

Confirming accounts receivable that have increased significantly from the year-end date is a test of details procedure, not a subsequent events procedure. The other options listed (inquiring of management, reading board of directors meetings, obtaining a legal counsel's letter) are all appropriate procedures for identifying subsequent events.

Harvey, CPA, Is Preparing an Audit Program for the Purpose