Acca aa s21 Notes

limited responsibility
for identifying non-compliance with ‘indirect’ laws and regulations 
that may have a 
material
effect on the financial statements.
Suspected NOCLAR should be discussed with the appropriate level of management and/or TCWG 
(unless prohibited by law or regulation – e.g. suspected money laundering). 
NOCLAR will only be reported in the auditor’s report if:
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Identified/suspected NOCLAR has a material effect on the financial statements and is not 
adequately reflected qualified opinion (or adverse if pervasive);
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Management/TCWG prevent the auditor from obtaining sufficient appropriate audit evidence 
(limitation on scope) qualified (or disclaimer if pervasive).
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REVIEW AND REPORTING
Chapter 26
SUBSEQUENT EVENTS
1. Events after the reporting period
Now we are going to look at the effect of events which occur after the end of the reporting period but 
before the auditor’s report has been signed. These events fall into two types.
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An adjusting event 
as its name might suggest, means that the accounts have to be adjusted in 
the light of what’s happened. The rule is that adjustments must be made if the event provides 
evidence of conditions that existed
at the end of the reporting period (the reporting date). 
An example would be a major customer going into liquidation, let’s say at the end of January, 
the year end was the end of December. That event tells us that the receivable at the end of 
December was probably bad and should have been written off or an allowance made. It’s very 
unlikely that the customer’s financial position worsened so remarkably during January. What the 
liquidation tells us is that the customer was in the bad situation at the end of December and if 
only we had known that then the receivable would have been written down.
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