Skip to content

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

While auditing Bharat Components Ltd, CA Tanvi plans procedures for events between the balance sheet date and the date of her report. Which statement about SA 560 is correct?

Subsequent event procedures may include reviewing or testing records and transactions between the balance sheet date and the report date, depending on risk assessment. They add to other procedures, such as cut-off tests and subsequent debtor receipts, which may also provide evidence about subsequent events.

  1. AThe procedures can include reviewing or testing accounting records or transactions in that period, and they are in addition to other procedures, such as cut-off tests or checks of subsequent receipts from debtors, that may also give evidence on subsequent eventsCorrect
  2. BSubsequent receipts from debtors can never be used as evidence about subsequent events
  3. CProcedures are limited to reading the minutes of the board meeting held after year-end
  4. DReview of transactions in that period is prohibited, as the audit period has ended

Explanation

SA 560 A6 says that, depending on the risk assessment, the procedures may involve review or testing of records or transactions in the interval. They are in addition to procedures done for other purposes, such as cut-off or subsequent receipts, which may also give evidence about subsequent events. The other options contradict this by restricting or prohibiting the work.

Did you get it right without looking?

One question tells you little. A timed set on Completion and Review shows your real accuracy, how long you take and where you lose marks.

Practise Completion and ReviewFree diagnostic mock

More Completion and Review questions