Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?
A)Determine whether inventory ordered before the year-end was included in the physical count.
B)Inquire about payroll checks that were recorded before year-end but cashed after year-end.
C)Investigate changes in capital stock recorded after year-end.
D)Review tax returns prepared by management after year-end.

Question

Quizplus · Accepted Answer

Investigating changes in capital stock recorded after year-end is a procedure aimed at identifying subsequent events that may affect the financial statements. This could reveal transactions or adjustments that need to be disclosed or recognized in the financial statements to ensure they present a true and fair view as of the balance sheet date.

Which of the Following Procedures Would an Auditor Most Likely