Determine what transactions involving material amounts

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Question: Subsequent Events Procedures. You are in the process of completing the gathering of sufficient appropriate evidence for Top Stove Corporation, a company engaged in the manufacture and sale of kerosene space heaters. To date there has been every indication that the financial statements of the client present fairly the position of the company at December 31 and the results of its operations and cash flows for the year then ended. Top Stove had total assets at December 31 of $4 million and a net profit for the year (after deducting federal and state income taxes) of $285,000. The principal records of the company include a general ledger, cash receipts record, voucher register, sales register, check register, and general journal. Financial statements are prepared monthly. Your audit report is dated February 20, and you plan to deliver the reports to the client by March 12.

Required: a. Write a brief statement about the purpose and period to be covered in a review of subsequent events.

b. Outline the program you would follow to determine what transactions involving material amounts, if any, have occurred since the date of the financial statements.

Reference no: EM131618988

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