Zelda Corp is reviewing certain events that have occurred since the end of December 31st Several days before the director of Zelda Corp approved the financial statements for this year which ended on 31 December 2018, Mr. Mickey, the director of operations of Zelda Corp, had found that one of Zelda Corp's financial staff had misused cash of CU 5 billion, which was the material amount of Zelda Corp's assets. Further investigation into the matter indicated that the money was stolen in November 2018.Zelda Corp's financial assets include 2,000,000 common shares of UMBRELLA CORP, which are categorized as "Financial assets at fair value through other comprehensive income". UMBRELLA CORP is a company listed on the Stock Exchange and the closing price is CU 1,500 per share on December 31, 2018. Subsequently, on January 12, 2019, UMBRELLA CORP's shares dropped significantly to CU 800 per share.Requested: Determine whether the above events are each an adjustment or non-adjustment event? Explain your answer

There are two types of events arisen after the conclusion of financial statements and before their…

Answered: Zelda Corp is reviewing certain events…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter17: Other Services Provided By Audit Firms

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Zelda Corp is reviewing certain events that have occurred since the end of December 31^st Several days before the director of Zelda Corp approved the financial statements for this year which ended on 31 December 2018, Mr. Mickey, the director of operations of Zelda Corp, had found that one of Zelda Corp's financial staff had misused cash of CU 5 billion, which was the material amount of Zelda Corp's assets. Further investigation into the matter indicated that the money was stolen in November 2018.
Zelda Corp's financial assets include 2,000,000 common shares of UMBRELLA CORP, which are categorized as "Financial assets at fair value through other comprehensive income". UMBRELLA CORP is a company listed on the Stock Exchange and the closing price is CU 1,500 per share on December 31, 2018. Subsequently, on January 12, 2019, UMBRELLA CORP's shares dropped significantly to CU 800 per share.

Requested: Determine whether the above events are each an adjustment or non-adjustment event? Explain your answer

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