Subsequent events

There are two objectives of ISA 560:

(a) To obtain sufficient appropriate audit evidence about whether events occurring between the date of the financial statements and the date of the auditor’s report that require adjustment of, or disclosure in, the financial statements are appropriately reflected in those financial statements in accordance with the applicable financial reporting framework;
and
(b) To respond appropriately to facts that become known to the auditor after the date of the auditor’s report, that, had they been known to the auditor at that date, may have caused the auditor to amend the auditor’s report.

The timeline in (a) corresponds to the timeline in “events after the reporting date” (IAS 10).

(b) considers what the audit should do – “respond appropriately” – after the date of the auditor’s report.

It is true that after the financial statements have been issued, the auditor has no obligation to perform any audit procedures regarding such financial statements.

However, it would surely be concerning for an audit if, after the financial statements have been issued, they learn of something that “if only they had known” they would not have given the audit opinion that they gave on those financial statements.

As the examiner’s report explains “As the auditor’s report has been issued to the shareholders but the audit opinion contained within is now incorrect, the auditor must take action to prevent reliance being placed on the existing report.”