Balance sheet Audit Report Date Date SUBSEQUENT DISCOVERY OF SUBSEQUENT EVENTS FACTS Requires Adjustment Original event took place before audit report date Transaction or event took place before the balance Auditor discovered event sheet date after the audit report date. An event or transaction If auditor had known of occurred between balance facts existing on the sheet and audit report date balance sheet date he or that affects the valuation of she would have required the original transaction adjustment or issued a different。 pinion REQUIRES DISCLOSURE REQUIRES RECALL OF FINANCIAL STATEMENTS DISTINCTION An event or transaction that BETWEEN REVIEW occurred between balance sheet and audit report date FOR SUBSEQUENT is so significant that it EVENTS AND requires disclosure even though it does not directly SUBSEQUENT affect current period DISCOⅤ ERY OF transactions FACTS AFTER THE BALANCE Arens, Loebbecke, Auditing, &/E SHEET DATE o2000 by Prentice Hall, IlArens, Loebbecke; Auditing, 8/E © 2000 by Prentice Hall, Inc. DISTINCTION BETWEEN REVIEW FOR SUBSEQUENT EVENTS AND SUBSEQUENT DISCOVERY OF FACTS AFTER THE BALANCE SHEET DATE