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During my revision, i encountered the following questions. i’m really confused, can you be so very nice and help me pleeeeeease(:
1 non-adjusting events
i’m aware of the definition of it, but i’m not sure if a non-adjusting event is likely to influence the going-concern of an entity, should it be regarded as an exception, and be treated as an adjusting event then??
i saw an answer indicating events which are usually seen as non-adjusting should be included in adjusing events when it can influence the going-concern.
but this answer is to a certain qustion in F7…..i dont know…i havent found such question in F8 yet….
2 isn’t Amendment and Adjusting the same?
in the 2011 Dec. exam paper (i suppose), Q5 lists 3 events and ask candidates whether these events needs AMENDMENTS.
i take it as the same as ADUSTING
and for event1, as it’s an adusting event, i claim that it needs amendment
BUT the answer says it dont need amendment WHILE confirming that it is an adjusting event.
may be AMENDMENTS DONT = ADJUSTING? what do you thinkBTW although ISA459 require all misstatements be communicated to management on a timely basis(regardless whether it’s material or not), it’s up the management to actually correct it or not, am i right?
your kindess will be apreciated!!
1 If the factory burns down 25 days after the accounting year end, this will not be an adjusting event. However, if there is no factory, going concern could be difficult.
2 ‘Amendment’ means any change. ‘Adjustment’ means change the figures in the FS. Using the word ‘amendment’ allows examination of whether or not something should be disclosed in the notes (an amendment to the FS, but not an adjustment). The answer to the question you are asking about says that consideration should be given to adjusting, but the amount is immaterial (4% of profit) so adjustment isn’t thought necessary.
You are right about ISA459: internal control is up to management.
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