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What are subsequent events and how does the auditor address them?

Intermediate

Answer

Subsequent events are events between the balance-sheet date and the date of the auditor's report (and beyond). Adjusting events provide evidence of conditions existing at the balance-sheet date (adjust the statements); non-adjusting events arise after (disclose if material). The auditor performs procedures (inquiries, reviewing minutes, later results) to identify them.
Real-world example A customer's post-year-end bankruptcy confirming a doubtful debt is an adjusting event requiring a write-down.

Common follow-ups: Adjusting vs non-adjusting events? | What procedures identify subsequent events?

Going Concern Audit Report & Opinions Audit Evidence & Procedures
All 18 Audit Evidence & Procedures questions