Which type of subsequent event requires consideration by management and evaluation by the auditor?

Question

Quizplus · Accepted Answer

Subsequent events are those that occur between the balance sheet date and the audit report date. Of the options given, option A refers to a subsequent event as it pertains to a contingent liability. Management must evaluate the likelihood of the liability, and the auditor must assess the adequacy of any related disclosure. Therefore, it requires consideration by management and evaluation by the auditor. Options B, C, and D do not refer to subsequent events.

Which Type of Subsequent Event Requires Consideration by Management and Evaluation