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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!!
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I believe that if an event is non adjusting, it means that the figures in the financial statements do not need adjusting, but that disclosure may still be required.
So a non adjusting event which impacts on the going concern ability of the entity will still be a non adjusting event becuase the figures in the financial statements will still be the same. It will however require disclosure in the finacial statements.
I understand amending to be different to adjusting, I may be wrong!
I think that adjusting is changing something before it has been approved, eg making changes before the FS have been signed/issued
I think that amendments are changing something after it has been approved eg making changes after the FS have been signed.
It is up to managment to correct misstatemts as you say, but it is up to the auditor to form an opionon on wheter or not the FS are materially misstated, so if management do not correct a misstatment the auditor has to modifiy his opionon to reflect the fact that the FS are not free from misstatement.
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