Statements on Auditing
Issued by the Committee on Auditing Procedure, American Institute of Accountants, 270 Madison Avenue, New York 16, N.Y.
Copyright 1954 by American Institute of Accountants
Events Subsequent to
the Date of Financial Statements
1. In recent years there has developed an increasing interest in exploring and clarifying the extent of the auditor's responsibility in connection with the disclosure of events occurring or becoming known subsequent to the date of statements concerning which he is expressing an opinion. This interest may be traced to specific happen-ings in part, but probably rests to a large extent on the general recognition that some such events may have a material effect on the re-lated financial statements and may require disclosure or adjustment to prevent such statements from being misleading.
2. An auditor's report is ordinarily rendered in connection with financial statements which purport to show, on an accounting basis, financial position as at a stated date and results of operations for a period ended on that date. Although such financial statements may be used for subsequent guidance, they are essentially historical in char-acter. Financial statements as of a given date and for a period ended on that date represent one instalment in the financial history of a business enterprise. They are so considered by the auditor in making his examination and in expressing his opinion with regard to the statements.