- October 6, 2021 at 2:23 pm #637133Noah098Member
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The auditor should review the financial statements to identify whether any disclosure has been made of the issue. If no disclosure has been made the financial statements will be materially misstated due to lack of disclosure of the non?adjusting event and overstatement of contingent assets.
maam here are we talking about the disclosure notes regarding the fact that insurance proceeds will no longer be received?
because now it makes no sense to disclose the non-adjusting event- contingent asset with re insurance proceeds- as it will not be received.
so then the auditor should look for amended disclosures which talks about non-receipts of proceeds? which would be in complete contrast to what the disclosure notes would have read like if they were receivable as expected earlier.October 6, 2021 at 6:06 pm #637149Kim SmithKeymaster
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The natural disaster is a non-adjusting event – the claim for any insurance proceeds must also be non-adjusting. Asset recognition in SoFP is incorrect – “at best”, the expectation of insurance proceeds can only be disclosed.
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