Consequences of Detection of Fraud After Reporting Date

Para 21 of Ind AS 10, Events after the Reporting Period, states that if non-adjusting events after the reporting period are material, non-disclosure could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.

Therefore, it is quite essential to determine whether the event is a non-adjusting event or an adjusting event. This determination depends upon many factors. For instance, where a fraud was discovered after the end of the reporting period but before the final approval of the financial statement, is a non-adjusting event or an adjusting event depending upon the committing or occurrence of frauds.

This standard talks about the discovery of frauds or errors after the reporting period and not about committing or occurrence of frauds after the reporting period.

In this story, we have discussed whether the discovery of fraud after the end of the reporting period is a non-adjusting event or an adjusting event.

Click Here To Read The Full Story