AUD, Auditing and Attestation

Sources for Subsequent Events and Subsequently Discovered Facts

Last reviewed 2026-09-14

The standards and authorities behind PocketCPA's AUD lessons on Subsequent Events and Subsequently Discovered Facts. The topic rests on AU-C 560.

About this topic

The financial statements have a cut-off date. The world does not. This topic covers what the auditor does about things that happen after year end, whether they turn up before the report goes out or after it.

The exam builds nearly every question here by moving one of those while holding the other still. A candidate who collapses them into one timeline will answer a reporting question with an accounting rule.

Key points

• Recognized subsequent events provide evidence about conditions existing at the balance sheet date and require adjustment.
• Nonrecognized subsequent events relate to conditions arising after the balance sheet date and require disclosure only.
• The auditor's responsibility extends to the date of the auditor's report; events discovered after require specific procedures.
• Dual dating limits the auditor's responsibility for the subsequent event to the specific matter disclosed.

What the lessons cover

1. The two types of subsequent events
2. Procedures during the subsequent period
3. Subsequently discovered facts
4. Omitted procedures after the report release date (AU-C 585 and AS 2901)
5. The three windows, and the standard that governs each

Authoritative references

Where these requirements sit in the literature. Each entry names the paragraph, then breaks it out provision by provision.

• AU-C 560.05 defines subsequent events: events between the date of the financial statements and the date of the auditor's report. Later discoveries are subsequently discovered facts.
• AU-C 560.07 carries the auditor's obligation to obtain sufficient appropriate audit evidence that events requiring adjustment or disclosure are properly reflected, over the ASC 855 classification.
• AU-C 560.09 requires the auditor to determine whether each identified event is appropriately reflected as an adjustment or as a disclosure.
• AU-C 560.08 carries the required procedures: an understanding of management's procedures for identifying subsequent events, inquiry of management and those charged with governance, reading the minutes of meetings held after the date of the financial statements, and reading the latest subsequent interim financial statements.
• AU-C 560.12 and .13 cover facts known before the report release date: discuss, amend if needed, then date as of the later date or dual date for the specific amendment. AU-C 560.13 is the dual-dating paragraph.
• AU-C 560.14 covers a fact known after the report release date.
• AU-C 560.15 covers management's revision after that date, including the imminent subsequent-period statements alternative to a reissuance, which mirrors AS 2905.06.
• AU-C 560.16 and .17 cover refusal and the steps to prevent future reliance.
• AU-C 585, Consideration of Omitted Procedures After the Report Release Date, is the section to reach for when the auditor concludes after releasing the report that a necessary procedure was omitted, and nothing new has come to light about the financial statements themselves. It is distinct from AU-C 560, which deals with facts discovered later about the statements.
  • AU-C 585.01 is the scope paragraph, noting that the circumstance is often surfaced by a peer review or inspection.
  • AU-C 585.04 is the importance assessment.
  • AU-C 585.05 is the impairment-plus-reliance trigger.
  • AU-C 585.07 is the referral to the auditor's attorney.
• AS 2801.03 through .07 carry the PCAOB's two types.
  • .03 is adjustment for conditions existing at the balance sheet date.
  • .04 is the paired receivable and litigation illustrations.
  • .05 is no adjustment plus disclosure, and the pro forma supplement for the second type.
  • .06 is the second-type examples list.
  • .07 is the realization-versus-market-price direction of travel.
• AS 2801.10 and .12 carry the subsequent period and the procedures that cover it.
  • .10 is the subsequent period, which extends to the report date and has no fixed length.
  • .12 is the procedures performed at or near the report date: interim statements, the seven-item officer inquiry, minutes, the lawyer's inquiry under AS 2505, a letter of representations dated as of the report date, and any further inquiries needed.
• AS 3110 carries dating.
  • .01 requires a date no earlier than the date sufficient appropriate evidence was obtained, and the same date for both reports in an integrated audit.
  • .02 carries the absence of a post-report-date duty, subject to AS 4101.
  • .05 carries the two methods with the illustrative dual-date form, dual dating limiting responsibility and redating extending it.
  • .06 carries the original date on reissuance.
  • .08 carries the separately captioned unaudited note for a disclosure-only event arising before reissuance.
• AS 2801.08 supplies the matching accounting rule: no adjustment between original issuance and reissuance unless the error-correction or prior-period-adjustment criteria are met.
• AS 3105.11: where a material subsequent event arising after fieldwork but before issuance must be disclosed, the only options are dual dating or redating with extended procedures. Labeling the note unaudited is not an acceptable alternative.
• AS 2905.03 through .09 carry the PCAOB treatment of facts discovered after the report date.
  • .03 is no further duty absent new information that may affect the report.
  • .04 is the determination of reliability and of whether the facts existed at the report date, discussing the matter with the client including the board.
  • .05 is the two conditions for action.
  • .06 is the client's three disclosure routes.
  • .07 is satisfying oneself that the client disclosed.
  • .08 is the refusal ladder, ending in notice to the client, to regulators having jurisdiction and to known users.
  • .09 is the limits on the auditor's own disclosure, including no comment on conduct or motives.
• AS 2901.01 through .07 is the PCAOB counterpart to AU-C 585, named in the PCAOB literature at AS 1215.82.
  • .01 is the scope and the express distinction from AS 2905.
  • .02 is no duty of retrospective review, with peer review or inspection as the usual source.
  • .04 is the importance assessment, together with compensating procedures and subsequent audits.
  • .05 is the impairment-plus-reliance trigger.
  • .06 is the hand-off to AS 2905.05 through .09 when facts emerge.
  • .07 is the referral to an attorney when the procedure cannot be applied.
• AS 4101.05, .10, .11 and .12 carry the 1933 Act extension of subsequent-events procedures to the registration statement's effective date.
  • .10 adds the prospectus reading and the officer representations.
  • .11 carries the predecessor auditor's parallel duty and the successor's representation letter.
  • .12 carries the option of withholding consent to use of the report.
• AS 2201.93 through .98 carry subsequent events in an integrated audit.
  • .93 is the inquiry and written representations.
  • .94 is the four things to inquire about and examine.
  • .96 is an adverse opinion or a disclaimer for an event affecting internal control as of the as-of date.
  • .97 is an explanatory paragraph for conditions arising afterwards.
• Supporting paragraphs, one point each.
  • AS 2805.09 carries representations dated as of the report date, and additional representations where the auditor dual dates.
  • AS 2505.04 carries the period in which the underlying cause for legal action occurred.
  • AS 2505.08 carries the lawyer's letter as the primary means of corroboration.
  • AS 3101.19 with AS 2801.09 carries the emphasis paragraph for an unusually important subsequent event.
  • AS 4105.46 carries the rule that facts discovered after an interim review report route back to AS 2905.

How PocketCPA uses these sources

Every lesson is written in original words and cites the paragraph each rule comes from. No standard's text is reproduced. How lessons and questions are written and checked is set out in our methodology.

See also

• Sources for every AUD topic
• Free AUD sample questions
• The CPA exam glossary