A subsequent event occurs:
A) before the end of the financial year.
B) between the client's financial year-end and the date of the auditor's report.
C) after the auditor completes the tests of controls.
D) after the auditor signs the audit engagement letter.

Question

Quizplus · Accepted Answer

A subsequent event is an event or transaction that occurs after the client's financial year-end but before the issuance of the auditor's report. Therefore, option B between the client's financial year-end and the date of the auditor's report is the correct choice. Options A, C, and D are incorrect as they either occur before the end of the financial year or after the auditor has completed their work or signed the engagement letter.

A Subsequent Event Occurs