a) Auditor’s responsibilities for subsequent events:

i. Between the year-end date and the date the auditor’s report is signed:

• The auditors shall perform audit procedures to identify and detect all material subsequent events that require adjustment of, or disclosure in, the financial statements.
• Additional audit procedures are not required where satisfactory audit evidence has already been gained.

ii. Between the date the auditor’s report is signed and the date the financial statements are issued:

• The auditor has no obligation to perform any audit procedures between the date the auditor’s report is signed and the date the financial statements are issued.
• However, if a fact becomes known that would have influenced the auditor’s report had the auditor known it at the date the report was signed, the issue shall be discussed with management to determine whether the financial statements need amendment.
• If the financial statements need amending, additional audit procedures shall be conducted, and the original subsequent events review should be extended to the date of the new auditor’s report.
• If management refuses to amend the financial statements, and the auditor’s report has already been provided to the entity, the auditor shall take steps to prevent reliance on the report. This might include speaking at the AGM or resigning.

b) Going concern:

i. Responsibilities of directors and auditors in relation to going concern:

• It is the directors’ responsibility to make an assessment of an entity’s ability to continue as a going concern and to prepare the financial statements on a going concern basis if they believe that is appropriate. This may require the directors to make judgments about inherently uncertain future outcomes of events or conditions.
• It is the auditor’s responsibility to obtain sufficient appropriate audit evidence about the appropriateness of management’s use of the going concern assumption in the preparation of the financial statements and to conclude whether there is material uncertainty about the entity’s ability to continue as a going concern.

ii. Audit procedures for the going concern review of Technolab:

• Obtain a copy of the cash flow and statement of profit or loss forecasts for the year ahead.
• Discuss with management the basis on which these forecasts have been prepared and obtain supporting documentation for any assumptions that are inconsistent with the current period’s performance.
• Compare the company’s performance post-year-end with the forecasts.
• Discuss with management whether there have been any breaches of health and safety regulations or potential litigation that may affect Technolab’s ability to trade.
• Review the company’s order book in the post-year period to verify continued demand for Technolab’s products.
• Discuss with management whether there are any supply problems and whether there are alternative suppliers available in case such problems arise.