When Eddie Okulicz released the audit report of C Corp. he did not anticipate that there would follow an announcement two days later that several days after year-end his client's
Foreign subsidiary had been nationalized by Libya for non-compliance to environmental laws of
The country. What type of subsequent event was this?
A) Type 1
B) Type 2
C) Type 1 and 2
D) this was not a subsequent event

Question

Quizplus · Accepted Answer

This is a Type 2 subsequent event, which is an event that occurs after the balance sheet date but before the financial statements are issued. This event is not related to conditions that existed before the balance sheet date, but it does provide additional information about the client's financial condition that should be disclosed in the financial statements.

When Eddie Okulicz Released the Audit Report of C Corp