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CA Intermediate · Auditing and Ethics

Completion and Review: CA Intermediate Auditing and Ethics

Completion and Review covers the final audit steps before the report is signed: checking subsequent events (SA 560), getting written representations (SA 580), assessing going concern (SA 570), doing an overall analytical review (SA 520), evaluating misstatements, reviewing documentation, and communicating. Solve questions by naming the standard, applying its rule to the facts, and concluding.

What this chapter covers

This chapter deals with what the auditor does after the main testing is over and before the audit report is signed. The auditor asks a final set of questions. Did anything happen after the year-end that changes the financial statements? Has management confirmed its key assertions in writing? Can the entity keep going for the foreseeable future? Do the numbers, taken as a whole, make sense? Are the uncorrected misstatements small enough to ignore?

The chapter is built around a handful of Standards on Auditing: SA 560 (Subsequent Events), SA 580 (Written Representations), SA 570 (Revised) (Going Concern) and SA 520 (Analytical Procedures). It also draws on the standards for evaluating misstatements, audit documentation and communication with those charged with governance. Questions are usually short scenarios where you must say what the auditor should do.

This chapter connects to the rest of the paper at several points. The risk assessment and audit evidence chapters explain how the audit reaches this stage. The audit report chapter depends on this one, because the conclusions here decide whether the opinion is unmodified or modified, and whether the report carries a separate "Material Uncertainty Related to Going Concern" section. Learn this chapter alongside the reporting chapter.

Completion questions are scenario-based and the answers follow a clear pattern, so they are very scoreable once you know the standards. They suit MCQs, because each standard has crisp rules on dates, who must be asked and what happens if management refuses. They also suit short written answers, where a standard-based reasoned conclusion earns step marks. The ideas also feed into audit reports, so what you learn here helps you in another high-value chapter.

Completion and Review: topics in the order to study them

  1. 1Subsequent Events under SA 560Start here because it is built around a timeline of dates, which gives you a framework for the rest of the chapter.
  2. 2Written Representations under SA 580It comes next because representations are obtained close to the report date, and it links directly to the timeline you just learned.
  3. 3Going Concern under SA 570 (Revised)It needs the earlier two: events after the period and management's plans (confirmed in writing) both feed the going concern conclusion.
  4. 4Analytical Procedures at Overall Review Stage (SA 520)Once you know the specific completion checks, this shows how a final overall review ties the numbers together and can reveal missed risks.
  5. 5Evaluating Misstatements and Audit Documentation ReviewLearn it after the checks above, because you now know where misstatements and open points come from and can judge their effect on the opinion.
  6. 6Auditor's Communication and Completion ProceduresFinish with communication, since it pulls all earlier findings into what is reported to management and those charged with governance.

How to prepare Completion and Review

Treat this chapter as a checklist of final questions, each tied to a standard. Aim to recall the rule, apply it to facts and state a conclusion.

  1. Read each standard's objective first, in your own words, so you know why the auditor does the procedure.
  2. For SA 560, draw a timeline with the balance sheet date, the audit report date and the date the financial statements are issued, and mark what the auditor must do in each period.
  3. For SA 580 and SA 570, list the triggers and the auditor's response in each case: what if management refuses, what if the uncertainty is material, what if the disclosure is adequate or not.
  4. Practise scenario questions by writing three lines: the standard, the facts, the conclusion. Do not write general theory.
  5. Link each outcome to the audit report: unmodified opinion, modified opinion, or unmodified opinion with a separate "Material Uncertainty Related to Going Concern" section.
  6. Solve MCQs by topic after each standard, and note why each wrong option fails.
  7. Revise using a one-page summary of rules, triggers and responses a day before the exam.

Common mistakes in Completion and Review

  • Treating all subsequent events as adjusting events.

    Fix: Ask one question first: did the condition exist at the balance sheet date? If yes, adjust. If it arose later, consider disclosure only.

  • Thinking a management representation can replace audit evidence.

    Fix: Remember that representations support other evidence. They do not replace evidence that should be reasonably available.

  • Confusing material uncertainty with an inappropriate going concern basis.

    Fix: Separate three cases: basis appropriate with no material uncertainty, basis appropriate with material uncertainty, and basis inappropriate. Learn the opinion for each, including adequate and inadequate disclosure.

  • Writing generic theory in a scenario answer.

    Fix: Use the format: standard, facts, conclusion. Quote the key fact from the question and state what the auditor should do.

  • Ignoring the dates in SA 560 questions.

    Fix: Mark the dates on a quick timeline before you answer, and then pick the correct auditor response.

  • Treating small misstatements as irrelevant because each is below materiality.

    Fix: Remember to evaluate uncorrected misstatements both individually and in aggregate, and consider their nature as well as their size.

Last-day revision: Completion and Review

  • SA 560 deals with three periods, and the auditor's responsibility differs in each. First, events between the date of the financial statements and the date of the auditor's report: the auditor must perform procedures to identify events that need adjustment or disclosure. Second, facts that become known after the report date but before the financial statements are issued. Third, facts that become known after the financial statements are issued. In the second period, the auditor has no obligation to perform procedures after the report date. Management is responsible for informing the auditor of facts that become known. The auditor then discusses the matter with management and determines whether the financial statements need amendment. If management does not amend the financial statements where the auditor believes they need to be amended, the auditor notifies management and those charged with governance not to issue the financial statements to third parties before the amendment is made. If they are issued anyway, the auditor takes appropriate action to prevent reliance on the auditor's report. In the third period, the auditor also has no duty to search for such facts. But if a fact comes to notice that, had it been known at the report date, may have caused the report to be amended, the auditor discusses it with management and determines whether the financial statements need amendment. If management does not take the necessary steps (such as amending the financial statements and informing those who already hold them), the auditor notifies management and those charged with governance that the auditor will seek to prevent future reliance on the report. If management still does not act, the auditor takes appropriate action to prevent reliance on the report. If the financial statements are amended, the auditor extends the audit procedures to the date of the new report and provides a new or amended report. Dual-dating is possible only where the amendment is limited to the specific subsequent event.
  • SA 560 separates events that give evidence of conditions at the period-end (adjusting) from those that arise afterwards (non-adjusting but may need disclosure).
  • The auditor must perform procedures to identify events up to the date of the auditor's report that need adjustment or disclosure.
  • Written representations are evidence from management, and they cannot replace other audit evidence that should be available.
  • If management does not provide one or more requested representations, the auditor discusses the matter with management, re-evaluates management's integrity and the reliability of other evidence, and determines the effect on the opinion. If (a) the auditor concludes there is sufficient doubt about management's integrity that the representations about its responsibilities are not reliable, or (b) management does not provide the representations about its responsibilities for the preparation and presentation of the financial statements and the completeness of information provided, the auditor shall withdraw from the engagement where withdrawal is possible under applicable law or regulation. If withdrawal is not possible, the auditor shall disclaim an opinion on the financial statements in accordance with SA 705 (Revised). For other refused representations, the auditor re-evaluates integrity and determines the effect on the opinion.
  • Going concern is a basis of accounting: the entity is assumed to continue in operation for the foreseeable future. The auditor concludes whether that basis is appropriate and whether a material uncertainty exists.
  • Under SA 570 (Revised), if a material uncertainty exists and disclosure is adequate, the opinion stays unmodified, with a separate section headed "Material Uncertainty Related to Going Concern".
  • If a material uncertainty exists but disclosure is inadequate, the auditor gives a qualified opinion if the effect is material but not pervasive, or an adverse opinion if the effect is pervasive. The Basis for Qualified (or Adverse) Opinion section must state that a material uncertainty exists and that the financial statements do not adequately disclose this matter. If the going concern basis of accounting is inappropriate, the auditor gives an adverse opinion.
  • At the overall review stage, analytical procedures help the auditor judge whether the financial statements are consistent with the auditor's understanding of the entity.
  • The auditor accumulates misstatements and judges whether uncorrected ones are material, individually or in total.
  • Audit documentation should let an experienced auditor with no prior link to the audit understand the work done and conclusions reached.
  • Significant matters from the audit should be communicated to those charged with governance on time.

Completion and Review practice questions

Completion and Review in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Completion and Review: frequently asked questions

Which standards matter most in the Completion and Review chapter?

SA 560, SA 580, SA 570 (Revised) and SA 520 are the core ones. Add the rules on evaluating misstatements, documentation and communication with those charged with governance. Learn them together, because one scenario can touch more than one.

How should I answer a subsequent events question in the written paper?

Identify the dates first, then state whether the event gives evidence of a condition at the period-end. Say whether the financial statements should be adjusted or disclosure made, and state the effect on the audit report if management does not agree.

Do MCQs come from this chapter?

Yes, the rules in these standards suit MCQs well, for example what the auditor does if management refuses representations, or which opinion fits a given going concern case. MCQs have no negative marking, so always attempt every one.

How is this chapter linked to the audit report?

Your conclusions on subsequent events, going concern and misstatements decide the type of opinion and any extra sections. Study the audit report chapter right after this one so the link stays clear.