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Auditors' Responsibilities for Events Arising After Balance Date
Author(s) -
STOKES DONALD J.,
SULLIVAN GRAHAM G.
Publication year - 1988
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.1988.tb00210.x
Subject(s) - audit , accounting , business , liability , statutory law , balance (ability) , compliance (psychology) , auditor's report , auditor independence , law , actuarial science , joint audit , internal audit , political science , psychology , social psychology , neuroscience
This paper critically evaluates relevant Australian and international professional documents applicable to the auditor's duties to audit and report on listed companies'annual accounts in the open‐ended period subsequent to balance date. This examination suggests certain defects within these documents of potentially serious legal consequence. Particular attention is focused on matters relating to the tenure of the statutory audit appointment, the derivative contractual arrangement and the notion of auditor reliance upon management. The extent to which compliance with professional documents, adopted throughout the profession, is a necessary and sufficient defence in lawsuits grounded in negligence claims is analysed. This analysis is sustained in terms of the legal standard of care that may be judicially applied in the determination of auditor liability in the open‐ended post balance date period.