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

Nair & Partners completed the audit of Sundaram Pharma Ltd, a listed company. The EQCR file contains a checklist showing procedures performed and a sign-off dated before the report date. The reviewer's note says one significant judgment on revenue recognition remains unresolved, but the reviewer signed the file anyway to meet the deadline. Which statement is correct under SQC 1?

The documentation is inadequate. SQC 1 requires the file to show that procedures were performed, the review was completed before the report was issued, and the reviewer knows of no unresolved matters suggesting significant judgments or conclusions were inappropriate. The unresolved revenue recognition judgment prevents the third requirement from being met.

1. ADocumentation is adequate because the checklist shows procedures were performed and the review was completed on time
2. BDocumentation is inadequate because it must show that the reviewer is not aware of any unresolved matters that would cause belief that significant judgments and conclusions were not appropriateCorrect
3. CDocumentation is adequate because unresolved matters need to be recorded only for unlisted entities
4. DDocumentation is inadequate only because the sign-off was before the report date