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

Kaveri Pharma Ltd's auditor signed the report on 10 June and the financial statements were issued. In July, management, at the auditor's request, amended the financial statements for a fact that became known after issue. The circumstances in paragraph 12 of SA 560 do not apply. What must the auditor do under SA 560?

The auditor must perform procedures on the amendment, review how management informs those holding the earlier statements, extend subsequent-events procedures to the new report date, and issue a new report dated no earlier than approval of the amended financial statements, since the paragraph 12 circumstances do not apply.

  1. AProvide a new report only, with no further procedures needed
  2. BCarry out procedures on the amendment, review management's steps to inform recipients of the earlier statements, extend subsequent-events procedures to the new report date, and issue a new report dated no earlier than approval of the amended statementsCorrect
  3. CAdd an Emphasis of Matter paragraph to the original report and leave its date unchanged
  4. DOnly review the steps taken by management to inform recipients; no new report is needed

Explanation

SA 560 para 15 requires procedures on the amendment, a review of management's steps to inform recipients of the earlier statements, and extension of the paragraph 6 and 7 procedures to the new report date. A new report must be provided, dated no earlier than approval of the amended statements. Merely adding an Emphasis of Matter to the old report omits these requirements.

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