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CA Intermediate · Auditing and Ethics · Audit Documentation

A CA firm's engagement for Iyer Logistics Ltd ended with the audit report dated 15 September 2026. The firm's quality policy is being framed on retention of audit documentation. Under SA 230 and SQM 1 principles, what is the minimum retention period for the audit engagement documentation?

The documentation should be retained for not less than five years from the date of the auditor's report. The firm's quality management policy under SQM 1 and SA 230 requires a retention period that meets its needs and legal requirements, with five years as the minimum.

  1. ANot less than five years from the date of the auditor's reportCorrect
  2. BNot less than three years from the end of the financial year
  3. CNot less than ten years from the date of the auditor's report
  4. DUntil the next year's audit report is signed

Explanation

SQM 1 requires the firm to establish policies for retention of engagement documentation for a period sufficient to meet its needs or legal and regulatory requirements. It specifies retention of not less than five years from the date of the auditor's report, or the group auditor's report date if later. Three years from year-end and ten years are not the stated minimum, and retaining only until the next report is too short.

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