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

Kaveri Foods Pvt Ltd's auditor has signed the report, and the financial statements have been issued. Later, the auditor learns of a fact that would have affected the report, and management decides to amend the financial statements. Which action is required of the auditor under SA 560, assuming the special circumstances of paragraph 12 do not apply?

When management amends issued financial statements, the auditor performs procedures on the amendment, reviews management's steps to inform recipients of the earlier statements, extends subsequent events procedures to the new report date, and provides a new report dated no earlier than approval of the amended statements.

  1. AReview the steps management took to inform recipients of the earlier financial statements, and give a new report after extending subsequent events procedures to the new report dateCorrect
  2. BGive a new report dated the original date, without further procedures
  3. CCarry out procedures only on the amendment and withdraw from the engagement
  4. DRely on management's representation and leave the original report unchanged

Explanation

SA 560 requires the auditor to carry out necessary procedures on the amendment, review management's steps to inform those holding the earlier statements, extend the subsequent events procedures to the date of the new report, date it no earlier than approval of the amended statements, and provide a new report. Dating it at the original date is wrong.

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