james b: subsequent events -
Authoritative Literature on this is: AU560 & AU561.
Type 1 Event: Keep the end of the fieldwork date for the date of the auditors report
Type 2 Event: Dual Date the report & add a paragraph to the report about the new unaudited note in the fin stmts (if there is one)
Type 1 events: Existed on or before the Balance Sheet date - but were not discovered until later. Prime example - a company that has a significant AR balance with your client files bankruptcy in a short period after the BS date. This indicates that the problem they had did exist as of the BS Date of your client and the AR should be adjusted. There would not necessarily be a note added to the fin stmts. Use the date of the end of the field work.
Type 2 events: Occur after the BS date - do not require the financials to be adjusted but MAY require the addition of a new financial statement note disclosure. Example would be a natural disaster causing significant financial loss to your client weeks after the BS date. The date of the auditor's report would be dual dated (unless they choose to accept responsibility through the subsequent event date) and the auditor would add an explanatory paragraph to the report about the note. The note the company prepares should be separate & marked "unaudited".
This is from my notecards - but I would recommend reviewing AU 560 & 561. Wiley Auditing book had a good section on this and said it subsequent event & report dating is usually tested.
AUD 2/19/2013: 90
REG 5/14/2013: 76