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

The auditor of Narmada Steels Ltd issues a new report on amended financial statements. Management asks that the new report carry the original date of 12 May because the board approved the first version then. The amended statements were approved on 9 July and the auditor extended the subsequent-event procedures. Which conclusion is correct?

The new report must be dated no earlier than 9 July, the approval date of the amended financial statements. SA 560 requires the subsequent-event procedures to be extended to the new report date, so using the original 12 May date or any earlier date is not acceptable.

  1. AAccept 12 May since the audit opinion is unchanged
  2. BUse a date between 12 May and 9 July at the auditor's choice
  3. CDate the new report no earlier than 9 July, the date of approval of the amended statementsCorrect
  4. DLeave the report undated until the AGM

Explanation

SA 560 requires the new report to be dated no earlier than the date of approval of the amended financial statements, with subsequent-event procedures extended to that date. A date such as 12 May or any date before 9 July would not cover that period, so the auditor cannot accept management's request.

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