Skip to content

CA Final · Advanced Auditing, Assurance and Professional Ethics · Completion and Review

After Kaveri Foods Ltd's financial statements and the auditor's report had been issued, management amended the financial statements for a fact that became known later. The circumstances in SA 560 paragraph 12 do not apply. Which action must the auditor take under SA 560 paragraph 15?

The auditor must perform procedures on the amendment, review management's steps to inform holders of the earlier statements, extend subsequent-event procedures to the new report date, and issue a new report dated no earlier than the approval of the amended financial statements.

  1. AOnly review the steps management took to inform recipients, without performing any procedures on the amendment
  2. BCarry out the necessary procedures on the amendment, review management's steps to inform recipients of the earlier statements, extend the subsequent-events procedures to the date of the new report, and provide a new auditor's report dated no earlier than the approval of the amended statementsCorrect
  3. CProvide a new report dated the same as the original report so that the audit timeline is unchanged
  4. DWithdraw from the engagement automatically and inform the Registrar of Companies

Explanation

Para 15 requires procedures on the amendment, a review of the steps management took to inform recipients, an extension of the paragraph 6 and 7 procedures to the new report date, and a new report dated no earlier than the approval of the amended statements. Backdating to the original date contradicts this. Automatic withdrawal is not required.

Did you get it right without looking?

One question tells you little. A timed set on Completion and Review shows your real accuracy, how long you take and where you lose marks.

Practise Completion and ReviewFree diagnostic mock

More Completion and Review questions