(i) The auditor’s responsibilities between the end of the reporting period and the date the auditor signs their audit report:
– In this period, the auditor has an active duty to ensure that the audit procedures they undertake will identify events after the reporting period/ subsequent events.
– This will include adopting procedures such as reviewing the procedures the directors have in place to identify subsequent events and reading the minutes of board meetings and any management accounts after the end of the reporting period.
– Where events after the reporting period are identified, the auditor should discuss these with management to determine whether the financial statements need to be amended in accordance with IAS 10.
– If the financial statements need to be amended and the directors make this amendment, then the auditor should vouch any changes to supporting documentation.
– If the financial statements need to be amended and the directors do not make this amendment, then the auditor must consider the impact on their report.
(ii) The auditor’s responsibilities between the date the auditor signs their audit report and the date of the AGM:
– In this period, the auditor has a passive duty which means that they are not responsible for identifying events after the reporting period/ subsequent events but they should act if such an event is communicated to them.
– Where the auditor becomes aware of an event, they should discuss the matter with the directors to determine whether the financial statements need to be amended.
– If the financial statements need to be amended and the directors make this amendment, the auditor will need to verify any changes and issue a new audit report. This will include an emphasis of matter paragraph if the financial statements had already been issued.
– If the financial statements need to be amended and the directors refuse to make this amendment then the auditor should seek legal advice. |
