Which of the following substantive procedures would auditors not ordinarily use in evaluating the potential existence of subsequent events?
A) Reviewing the latest interim financial statements.
B) Performing cutoff testing near year-end.
C) Inquiring of officers and other client executives.
D) Obtaining written representations.

Question

Quizplus · Accepted Answer

Performing cutoff testing near year-end is a procedure used to test the completeness and accuracy of transactions recorded in the proper period, it is not directly related to evaluating the potential existence of subsequent events. The other three procedures listed are commonly used in evaluating subsequent events. Reviewing the latest interim financial statements would help identify events that may have occurred after the date of the financial statements being audited. Inquiring of officers and other client executives would help identify any known or expected events that may affect the financial statements, and obtaining written representations helps to confirm that all subsequent events have been disclosed to the auditor.

Which of the Following Substantive Procedures Would Auditors Not Ordinarily