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

During the audit of Sundaram Engineering Ltd., the auditor wants to cover events between the balance sheet date and the date of the auditor's report. The engagement partner says the year-end cut-off tests and the review of post-year-end receipts from debtors already done are enough on their own. Which view is consistent with SA 560?

The view is incorrect. Subsequent events procedures are required in addition to procedures performed for other purposes. Cut-off and subsequent receipt tests may yield useful evidence, but they do not replace the specific procedures, which may also include reviewing records and transactions up to the report date.

1. ACorrect, because the cut-off and subsequent receipts tests fully replace the subsequent events procedures
2. BIncorrect, because subsequent events procedures are required in addition to procedures performed for other purposes, even though those may also give evidence about subsequent eventsCorrect
3. CCorrect, but only when the entity is unlisted
4. DIncorrect, because subsequent events need to be covered only through management representations