HKSA 560 - Subsequent Events

1. INTRODUCTION

Scope of this HKSA (Paragraph 1)

HKSA 560 deals with the auditor's responsibilities relating to subsequent events in an audit of financial statements. It does NOT deal with matters relating to the auditor's responsibilities for other information obtained after the date of the auditor's report, which are addressed in HKSA 720 (Revised). However, such other information may bring to light a subsequent event that is within the scope of this HKSA.

Subsequent Events (Paragraph 2)

Financial statements may be affected by certain events that occur after the date of the financial statements. Many financial reporting frameworks specifically refer to such events. Such financial reporting frameworks ordinarily identify two types of events:

Type 1: Adjusting Events

Those that provide evidence of conditions that existed at the date of the financial statements

Type 2: Non-adjusting Events

Those that provide evidence of conditions that arose after the date of the financial statements

HKSA 700 (Revised) explains that the date of the auditor's report informs the reader that the auditor has considered the effect of events and transactions of which the auditor becomes aware and that occurred up to that date.

Effective Date (Paragraph 3)

This HKSA is effective for audits of financial statements for periods beginning on or after 15 December 2009.

2. OBJECTIVES (Paragraph 4)

The objectives of the auditor are:

(a) To obtain sufficient appropriate audit evidence about whether events occurring between the date of the financial statements and the date of the auditor's report that require adjustment of, or disclosure in, the financial statements are appropriately reflected in those financial statements in accordance with the applicable financial reporting framework; and

(b) To respond appropriately to facts that become known to the auditor after the date of the auditor's report, that, had they been known to the auditor at that date, may have caused the auditor to amend the auditor's report.

術語	定義
(a) 財務報表日期	財務報表所涵蓋的最新春期的結束日期
(b) 財務報表批准日期	構成財務報表的所有報表（包括相關附註）已編製完成，且具有公認權力的人士已聲明其對該等財務報表承擔責任的日期
(c) 審計報告日期	審計師根據香港審計準則第700號（修訂本）在財務報表報告上簽署的日期
(d) 財務報表發布日期	審計報告和經審計的財務報表可供第三方查閱的日期
(e) 期後事項	在財務報表日期與審計報告日期之間發生的事項，以及審計師在審計報告日期後知悉的事實

3. DEFINITIONS (Paragraph 5)

For purposes of the HKSAs, the following terms have the meanings attributed below:

Term	Definition
(a) Date of the financial statements	The date of the end of the latest period covered by the financial statements
(b) Date of approval of the financial statements	The date on which all the statements that comprise the financial statements, including the related notes, have been prepared and those with the recognized authority have asserted that they have taken responsibility for those financial statements
(c) Date of the auditor's report	The date the auditor dates the report on the financial statements in accordance with HKSA 700 (Revised)
(d) Date the financial statements are issued	The date that the auditor's report and audited financial statements are made available to third parties
(e) Subsequent events	Events occurring between the date of the financial statements and the date of the auditor's report, and facts that become known to the auditor after the date of the auditor's report

Application Guidance on Definitions

Date of Approval of the Financial Statements (A2)

In some jurisdictions, law or regulation identifies the individuals or bodies responsible for concluding that all statements comprising the financial statements have been prepared

In other jurisdictions, the approval process is not prescribed and the entity follows its own procedures

Final approval by shareholders is NOT necessary for the auditor to conclude that sufficient appropriate audit evidence has been obtained

The date of approval is the EARLIER date on which those with recognized authority determine that all statements have been prepared and responsibility has been asserted

Date of the Auditor's Report (A3)

Cannot be dated earlier than the date on which the auditor has obtained sufficient appropriate audit evidence

Cannot be earlier than the date of approval of the financial statements

A time period may elapse due to administrative issues between the date of the auditor's report and the date the auditor's report is provided to the entity

Date the Financial Statements Are Issued (A4-A5)

Generally depends on the regulatory environment of the entity

May be the date that they are filed with a regulatory authority

Audited financial statements cannot be issued without an auditor's report

For public sector: may be the date the audited financial statements and auditor's report are presented to the legislature or otherwise made public

4. REQUIREMENTS

4.1 Events Occurring between the Date of the Financial Statements and the Date of the Auditor's Report (Paragraphs 6-9)

Audit Procedures (Paragraph 6)

The auditor shall perform audit procedures designed to obtain sufficient appropriate audit evidence that all events occurring between the date of the financial statements and the date of the auditor's report that require adjustment of, or disclosure in, the financial statements have been identified.

Important Note: The auditor is NOT expected to perform additional audit procedures on matters to which previously applied audit procedures have provided satisfactory conclusions.

Required Procedures (Paragraph 7)

The auditor shall perform the procedures so that they cover the period from the date of the financial statements to the date of the auditor's report, or as near as practicable thereto. The auditor shall take into account the auditor's risk assessment in determining the nature and extent of such audit procedures, which shall include:

(a) Obtaining an understanding of any procedures management has established to ensure that subsequent events are identified.

(b) Inquiring of management and, where appropriate, those charged with governance as to whether any subsequent events have occurred which might affect the financial statements.

(c) Reading minutes, if any, of the meetings of the entity's owners, management and those charged with governance that have been held after the date of the financial statements and inquiring about matters discussed at any such meetings for which minutes are not yet available.

(d) Reading the entity's latest subsequent interim financial statements, if any.

Evaluation of Identified Events (Paragraph 8)

If, as a result of the procedures performed, the auditor identifies events that require adjustment of, or disclosure in, the financial statements, the auditor shall determine whether each such event is appropriately reflected in those financial statements in accordance with the applicable financial reporting framework.

Written Representations (Paragraph 9)

The auditor shall request management and, where appropriate, those charged with governance, to provide a written representation in accordance with HKSA 580 that all events occurring subsequent to the date of the financial statements and for which the applicable financial reporting framework requires adjustment or disclosure have been adjusted or disclosed.

Application Guidance on Procedures (A6-A10)

Additional Procedures (A6)

Depending on risk assessment, procedures may include review or testing of accounting records or transactions occurring between the date of the financial statements and the date of the auditor's report

These procedures are in addition to procedures performed for other purposes (e.g., cutoff procedures, subsequent receipts of accounts receivable)

Dependence on Available Information (A7)

Subsequent events procedures may depend on the information available

Where accounting records are not up-to-date, relevant audit procedures may take the form of inspection of available books and records, including bank statements

Additional Matters to Consider (A8)

The auditor may consider it necessary and appropriate to:

Read the entity's latest available budgets, cash flow forecasts and other related management reports

Inquire, or extend previous inquiries, of the entity's legal counsel concerning litigation and claims

Consider whether written representations covering particular subsequent events may be necessary

Specific Inquiries (A9)

When inquiring of management, the auditor may inquire about:

Whether new commitments, borrowings or guarantees have been entered into

Whether sales or acquisitions of assets have occurred or are planned

Whether there have been increases in capital or issuance of debt instruments

Whether any assets have been appropriated by government or destroyed

Whether there have been any developments regarding contingencies

Whether any unusual accounting adjustments have been made or are contemplated

Whether any events have occurred that will bring into question the appropriateness of accounting policies

Whether any events have occurred relevant to measurement of estimates or provisions

Whether any events have occurred relevant to recoverability of assets

Public Sector Considerations (A10)

In the public sector, the auditor may read the official records of relevant proceedings of the legislature and inquire about matters addressed in proceedings for which official records are not yet available.

4.2 Facts Which Become Known to the Auditor after the Date of the Auditor's Report but before the Date the Financial Statements Are Issued (Paragraphs 10-13)

Auditor's Obligations (Paragraph 10)

The auditor has no obligation to perform any audit procedures regarding the financial statements after the date of the auditor's report.

However, if, after the date of the auditor's report but before the date the financial statements are issued, a fact becomes known to the auditor that, had it been known to the auditor at the date of the auditor's report, may have caused the auditor to amend the auditor's report, the auditor shall:

(a) Discuss the matter with management and, where appropriate, those charged with governance;

(b) Determine whether the financial statements need amendment and, if so,

(c) Inquire how management intends to address the matter in the financial statements.

If Management Amends the Financial Statements (Paragraph 11)

If management amends the financial statements, the auditor shall:

(a) Carry out the audit procedures necessary in the circumstances on the amendment.

(b) Unless the circumstances in paragraph 12 apply:

(i) Extend the audit procedures referred to in paragraphs 6 and 7 to the date of the new auditor's report; and

(ii) Provide a new auditor's report on the amended financial statements. The new auditor's report shall not be dated earlier than the date of approval of the amended financial statements.

Dual Dating / Restricted Amendment (Paragraph 12)

Where law, regulation or the financial reporting framework does not prohibit management from restricting the amendment of the financial statements to the effects of the subsequent event or events causing that amendment and those responsible for approving the financial statements are not prohibited from restricting their approval to that amendment, the auditor is permitted to restrict the audit procedures on subsequent events required in paragraph 11(b)(i) to that amendment.

In such cases, the auditor shall either:

(a) Amend the auditor's report to include an additional date restricted to that amendment that thereby indicates that the auditor's procedures on subsequent events are restricted solely to the amendment of the financial statements described in the relevant note to the financial statements; OR

(b) Provide a new or amended auditor's report that includes a statement in an Emphasis of Matter paragraph or Other Matter paragraph that conveys that the auditor's procedures on subsequent events are restricted solely to the amendment of the financial statements as described in the relevant note to the financial statements.

If Management Does NOT Amend the Financial Statements (Paragraph 13)

In some jurisdictions, management may not be required by law, regulation or the financial reporting framework to issue amended financial statements and, accordingly, the auditor need not provide an amended or new auditor's report.

However, if management does NOT amend the financial statements in circumstances where the auditor believes they need to be amended, then:

(a) If the auditor's report has not yet been provided to the entity, the auditor shall modify the opinion as required by HKSA 705 (Revised) and then provide the auditor's report; OR

(b) If the auditor's report has already been provided to the entity, the auditor shall notify management and, unless all of those charged with governance are involved in managing the entity, those charged with governance, not to issue the financial statements to third parties before the necessary amendments have been made. If the financial statements are nevertheless subsequently issued without the necessary amendments, the auditor shall take appropriate action to seek to prevent reliance on the auditor's report.

Application Guidance (A11-A17)

Implications of Other Information (A11)

While the auditor has no obligation to perform any audit procedures regarding the financial statements after the date of the auditor's report but before the date the financial statements are issued, HKSA 720 (Revised) contains requirements and guidance with respect to other information obtained after the date of the auditor's report.

Management Responsibility (A12)

The terms of the audit engagement include the agreement of management to inform the auditor of facts that may affect the financial statements, of which management may become aware during the period from the date of the auditor's report to the date the financial statements are issued.

Dual Dating Illustration (A13)

When the auditor amends the auditor's report to include an additional date restricted to that amendment, the date of the auditor's report on the financial statements prior to their subsequent amendment by management remains unchanged. An additional date is included to inform users that the auditor's procedures subsequent to that date were restricted to the subsequent amendment.

Example of dual dating:

(Date of auditor's report), except as to Note Y, which is as of (date of completion of audit procedures restricted to amendment described in Note Y).

No Amendment by Management (A14-A15)

In some jurisdictions, management may not be required to issue amended financial statements when issuance of the financial statements for the following period is imminent, provided appropriate disclosures are made

In the public sector, actions may include reporting separately to the legislature

Auditor Action to Prevent Reliance (A16-A17)

The auditor may need to fulfill additional legal obligations even when management has agreed not to issue the financial statements

Where management has issued the financial statements despite the auditor's notification, the auditor's course of action depends upon legal rights and obligations

The auditor may consider it appropriate to seek legal advice

4.3 Facts Which Become Known to the Auditor after the Financial Statements Have Been Issued (Paragraphs 14-17)

Auditor's Obligations (Paragraph 14)

After the financial statements have been issued, the auditor has no obligation to perform any audit procedures regarding such financial statements.

However, if, after the financial statements have been issued, a fact becomes known to the auditor that, had it been known to the auditor at the date of the auditor's report, may have caused the auditor to amend the auditor's report, the auditor shall:

(a) Discuss the matter with management and, where appropriate, those charged with governance;

(b) Determine whether the financial statements need amendment; and, if so,

(c) Inquire how management intends to address the matter in the financial statements.

If Management Amends the Financial Statements (Paragraph 15)

If management amends the financial statements, the auditor shall:

(a) Carry out the audit procedures necessary in the circumstances on the amendment.

(b) Review the steps taken by management to ensure that anyone in receipt of the previously issued financial statements together with the auditor's report thereon is informed of the situation.

(c) Unless the circumstances in paragraph 12 apply:

(i) Extend the audit procedures referred to in paragraphs 6 and 7 to the date of the new auditor's report, and date the new auditor's report no earlier than the date of approval of the amended financial statements; and

(ii) Provide a new auditor's report on the amended financial statements.

(d) When the circumstances in paragraph 12 apply, amend the auditor's report, or provide a new auditor's report as required by paragraph 12.

Content of New or Amended Auditor's Report (Paragraph 16)

The auditor shall include in the new or amended auditor's report an Emphasis of Matter paragraph or Other Matter paragraph referring to a note to the financial statements that more extensively discusses the reason for the amendment of the previously issued financial statements and to the earlier report provided by the auditor.

If Management Does NOT Take Necessary Steps (Paragraph 17)

If management does NOT take the necessary steps to ensure that anyone in receipt of the previously issued financial statements is informed of the situation and does NOT amend the financial statements in circumstances where the auditor believes they need to be amended, the auditor shall:

Notify management and, unless all of those charged with governance are involved in managing the entity, those charged with governance, that the auditor will seek to prevent future reliance on the auditor's report.

If, despite such notification, management or those charged with governance do not take these necessary steps, the auditor shall take appropriate action to seek to prevent reliance on the auditor's report.

Application Guidance (A18-A20)

Implications of Other Information (A18)

The auditor's obligations regarding other information received after the date of the auditor's report are addressed in HKSA 720 (Revised).

Public Sector Considerations (A19)

In some jurisdictions, entities in the public sector may be prohibited from issuing amended financial statements by law or regulation. In such circumstances, the appropriate course of action for the auditor may be to report to the appropriate statutory body.

Auditor Action to Prevent Reliance (A20)

Where the auditor believes that management or those charged with governance have failed to take the necessary steps despite the auditor's prior notification, the auditor's course of action depends upon the auditor's legal rights and obligations. The auditor may consider it appropriate to seek legal advice.

5. CONFORMITY AND COMPLIANCE WITH INTERNATIONAL STANDARDS ON AUDITING (Paragraph 18)

As of March 2025, this HKSA conforms with International Standard on Auditing (ISA) 560, Subsequent Events. Compliance with the requirements of this HKSA ensures compliance with ISA 560.

時間段	審計師義務	主要行動
財務報表日期至審計報告日期	實施審計程序以識別期後事項	第7段程序：了解管理層程序、詢問、閱讀會議記錄、閱讀中期財務報表
審計報告日期後但在財務報表發布前	無義務實施程序，但若知悉事實必須行動	與管理層討論，確定是否需要修改，詢問管理層如何處理
財務報表發布後	無義務實施程序，但若知悉事實必須行動	與管理層討論，確定是否需要修改，審查管理層通知接收方的步驟

6. SUMMARY OF KEY TIMELINES AND AUDITOR RESPONSIBILITIES

Time Period	Auditor's Obligation	Key Actions Required
Date of FS to Date of Auditor's Report	Perform audit procedures to identify subsequent events	Procedures per para 7: understand mgmt procedures, inquire, read minutes, read interim FS
After Date of Auditor's Report but before FS Issued	No obligation to perform procedures, but must act if facts become known	Discuss with mgmt, determine if amendment needed, inquire how mgmt will address
After FS Issued	No obligation to perform procedures, but must act if facts become known	Discuss with mgmt, determine if amendment needed, review mgmt's steps to inform recipients

7. KEY TAKEAWAYS SUMMARY TABLE

Aspect	Key Point
Two types of subsequent events	Adjusting (conditions existed at year-end) and Non-adjusting (conditions arose after year-end)
Period 1 procedures	From date of FS to date of auditor's report - mandatory procedures required
Period 2 (after report, before issuance)	No obligation to search, but must act if facts become known
Period 3 (after issuance)	No obligation to search, but must act if facts become known
If mgmt amends FS (Period 2)	Extend procedures, provide new auditor's report
Dual dating	Permitted when amendment is restricted to specific event
If mgmt does NOT amend	Modify opinion (if report not yet issued) or notify mgmt not to issue (if report already issued)
After FS issued - mgmt amends	Perform procedures on amendment, review mgmt's communication to recipients, provide new report with Emphasis of Matter
After FS issued - mgmt does NOT amend	Notify mgmt and TCWG, take action to prevent reliance on auditor's report
Written representations	Required from mgmt/TCWG regarding subsequent events

HKSA 560 - Subsequent Events