Which of the following procedures would an auditor most likely perform to obtain evidence about an entity’s subsequent events?

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Which of the following procedures would an auditor most likely perform to obtain evidence about an entity’s subsequent events?

A. Reconcile bank activity for the month after the balance sheet date with cash activity reflected in the accounting records.
B. Obtain a letter from the entity’s attorney describing any pending litigation, unasserted claims, and loss contingencies.
C. Review the treasurer’s monthly reports on temporary investments owned, purchased, and sold.
D. Examine on a test basis the purchase invoices and receiving reports for several days after the inventory date.

Answer: Obtain a letter from the entity’s attorney describing any pending litigation, unasserted claims, and loss contingencies.

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