What are non-adjusting events as per ISA 560?

Non-adjusting events, as defined by ISA 560, pertain to conditions or occurrences that arise after the reporting period but before the financial statements are issued. These events do not provide additional evidence regarding conditions that existed at the end of the reporting period, meaning they do not affect the amounts recognized in the financial statements. Instead, they often affect how the users of the financial statements might perceive the company's financial position or performance, but they do not require any adjustments to the figures reported.

In this context, it's crucial to understand that while non-adjusting events occur after the financial statement date, they may still require disclosure in the financial statements if they are deemed material. This practice ensures that stakeholders are informed of significant developments that could influence decisions, even though they do not alter the historical financial data.

Other options presented focus on aspects that either contradict the definition of non-adjusting events or do not align with the specific requirements set out in ISA 560. For instance, events that occurred prior to the financial statement date would typically be treated as adjusting events if they provide evidence about conditions that existed at that time. Similarly, legal issues affecting the audit report are more closely related to the implications of audit findings rather than the classification of events related to the financial statements