What it is
Subsequent events are events or transactions after the balance sheet date but before the financial statements are issued or available to be issued. ASC 855 splits them into recognized events (conditions that existed at the balance sheet date) and nonrecognized events (conditions that arose after it).
AU-C 560 requires procedures covering the period from the financial statement date to the date of the auditor’s report. This document has a procedures checklist, an events log and a short conclusion memo, plus guidance for facts that come to light after the report date.
When to use it
- In the final weeks of fieldwork, updated up to the report date.
- When a reissued report or a delay between fieldwork and release means the review must be brought forward.
What’s inside
- AU-C 560 procedures checklist: inquiry, minutes, interim financials, legal, debt and cash activity
- Events log with ASC 855 classification and accounting / disclosure effect
- Date through which events were evaluated and the disclosure of that date
- Subsequently discovered facts: before and after the report is released
- Conclusion memo and sign-off
Standard cited
This template follows AU-C 560 / ASC 855. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 560 explained.
Questions
What is the difference between recognized and nonrecognized subsequent events?
A recognized event gives more evidence about a condition that already existed at the balance sheet date, such as a customer bankruptcy that confirms an uncollectible receivable; the statements are adjusted. A nonrecognized event reflects a condition that arose afterwards, such as a fire or a new borrowing; it is disclosed if needed to keep the statements from being misleading, but not recorded.
Through what date must a private company evaluate subsequent events?
An entity that is not an SEC filer evaluates through the date the financial statements are available to be issued and discloses that date and whether it is the issued or available-to-be-issued date. SEC filers evaluate through the issuance date and do not disclose it.
Does the auditor have to keep looking after the report date?
No active procedures are required after the report date. But if a fact becomes known that might have changed the report, AU-C 560 requires the auditor to discuss it with management and decide whether the statements need revising, whether before or after the report is released.
Related templates
- Going Concern Evaluation Memo (AU-C 570 / ASC 205-40)
- Attorney Legal Letter Inquiry (AU-C 501 / ASC 450)
- Management Representation Letter (AU-C 580)
Last updated 11/04/2026. All free templates.