Below here were subsequent event that occurs in your client. Consider that all events were has material effect on client’s financial statement. The auditor is auditing financial statement for the year ended December 31, 2020 and is completing the audit in March 15, 2021. 4) On February 15, 2021, the civil court decided that Client Company must pay compensation loss due to defect product sold to their customer. lawsuits started in court since June 2020 5) On February 20, 2021, a major of client customer which has large amount of outstanding A/R suddenly fill for bankruptcy 6) On April 1, 2021 fire rage accident destroy client warehouse and the loss were material Questions: Indicate type 1 subsequent event, type 2 subsequent event, or not subsequent event. What kinds of action, client need to do? Adjust, disclose, or no need to do adjust/disclose for every point form 1) to 6). Provide the reason why it should be adjusted or disclose or neither.
Below here were subsequent event that occurs in your client. Consider that all events were has material effect on client’s financial statement. The auditor is auditing financial statement for the year ended December 31, 2020 and is completing the audit in March 15, 2021.
4) On February 15, 2021, the civil court decided that Client Company must pay compensation loss due to defect product sold to their customer. lawsuits started in court since June 2020
5) On February 20, 2021, a major of client customer which has large amount of outstanding A/R suddenly fill for bankruptcy
6) On April 1, 2021 fire rage accident destroy client warehouse and the loss were material
Questions:
Indicate type 1 subsequent event, type 2 subsequent event, or not subsequent event. What kinds of action, client need to do? Adjust, disclose, or no need to do adjust/disclose for every point form 1) to 6). Provide the reason why it should be adjusted or disclose or neither.
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