SAS No. 30 Subsequent Events 　 　

Status

Revised by Auditing Standards Committee in Taiwan on 28 December, 1999.

Summary

The auditor should consider the effect of subsequent events on the financial statements and on the auditor’s report.

Subsequent events include:

  • Events Occurring Up to the Date of the Auditor’s Report
  • Facts Discovered After the Date of the Auditor’s Report but Before the Financial Statements are Issued
  • Facts Discovered After the Financial Statements have been Issued

Type of subsequent events influences toward financial statements:

  • Those that provide further evidence of conditions that existed at period end; and
  • Those that are indicative of conditions that arose subsequent to period end.
Events Occurring Up to the Date of the Auditor’s Report
The auditor should perform audit procedures designed to obtain sufficient appropriate audit evidence that all events up to the date of the auditor’s report that may require adjustment of, or disclosure in, the financial statements have been identified.

When the auditor becomes aware of events which materially affect the financial statements, the auditor should consider whether such events are properly accounted for and adequately disclosed in the financial statements.

Facts Discovered After the Date of the Auditor’s Report but Before the Financial Statements are Issued
When, after the date of the auditor’s report but before the financial statements are issued, the auditor becomes aware of a fact which may materially affect the financial statements, the auditor should consider whether the financial statements need amendment, should discuss the matter with management, and should take the action appropriate in the circumstances.

When management does not amend the financial statements in circumstances where the auditor believes they need to be amended and the auditor’s report has not been released to the entity, the auditor should express a qualified opinion or an adverse opinion. 　

Facts Discovered After the Financial Statements have been Issued
After the financial statements have been issued, the auditor has no obligation to make any inquiry regarding such financial statements.

When, after the financial statements have been issued, the auditor becomes aware of a fact which existed at the date of the auditor’s report and which, if known at that date, may have caused the auditor to modify the auditor’s report, the auditor should consider whether the financial statements need revision, should discuss the matter with management, and should take the action appropriate in the circumstances.

The new auditor’s report should include an emphasis of a matter paragraph referring to a note to the financial statements that more extensively discusses the reason for the revision of the previously issued financial statements and to the earlier report issued by the auditor. 　 　 　

When management does not take the necessary steps to ensure that anyone in receipt of the previously issued financial statements together with the auditor’s report thereon is informed of the situation and does not revise the financial statements in circumstances where the auditor believes they need to be revised, the auditor would notify those charged with governance of the entity that action will be taken by the auditor to prevent future reliance on the auditor’s report. The action taken will depend on the auditor’s legal rights and obligations and the recommendations of the auditor’s lawyers. 　

It may not be necessary to revise the financial statements and issue a new auditor’s report when issue of the financial statements for the following period is imminent, provided appropriate disclosures are to be made in such statements.

Effective date

This Statement is effective from 31 December, 1999.
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