CA Final · Advanced Auditing, Assurance and Professional Ethics · Quality Control

Before issuing the audit report of a listed client, the engagement quality control review file at Bhatt & Partners shows that the review procedures required by firm policy were performed and the review was completed on 4 May, before the report date of 6 May. However, the reviewer's note records an unresolved disagreement on the appropriateness of a significant impairment judgment made by the team. The partner wants to sign the report, saying the review is formally complete. What is the correct conclusion?

The review cannot be treated as satisfactorily completed. SQC 1 requires documentation that the reviewer is not aware of unresolved matters suggesting the team's significant judgments or conclusions were inappropriate. With the impairment disagreement unresolved, that documentation cannot be given, so the report should not be issued until the matter is resolved.

1. AThe report can be signed, since the review was completed before the report date
2. BThe report can be signed if the unresolved matter is recorded in the review file
3. CThe documentation cannot support that the reviewer is unaware of unresolved matters questioning the significant judgments, so the review should not be treated as satisfactorily completed until the matter is resolvedCorrect
4. DThe review is invalid only because it was completed two days before the report date