Bestwood Electronics
Your firm is the auditor of Bestwood Electronics Co, a listed company, which assembles microcomputers and wholesales them and associated equipment to retailers. Many of the parts for the computers and the associated equipment are bought from the Far East. These computers are used by businesses for accounting, word processing and other computing tasks.
You have been asked by the partner in charge of the audit to consider your firm's audit responsibilities in relation to subsequent events, and the audit work you will carry out on these matters.
Required
(a) Describe the responsibilities of the auditors for detecting misstatements in the financial statements during the following periods:
i) From the period-end to the date of the auditor's report
ii) From the date of the auditor's report to the issue of the financial statements
iii) After the date the financial statements are issued
(b) Describe the audit work you will carry out in period (a)(i) above which involves consideration of subsequent events.
(c) Describe the work you will carry out in period (a)(ii) above to ensure no adjustments are required to the financial statements.