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

While auditing Himalaya Foods Ltd, the auditor performed cut-off tests and examined collections from debtors after the year-end for valuing receivables. The audit senior argues these procedures mean no further subsequent events procedures are needed for the period up to the report date. What is the correct conclusion?

The senior is wrong. The subsequent events procedures are in addition to procedures done for other purposes, such as cut-off testing or review of subsequent debtor receipts. Those procedures may supply evidence about subsequent events but do not replace the required procedures.

1. ACorrect, because cut-off and subsequent receipt tests fully discharge the subsequent events requirement
2. BIncorrect, because subsequent events procedures are required only after the report date
3. CIncorrect, because the required subsequent events procedures are in addition to procedures performed for other purposes, even though those may provide some evidence about subsequent eventsCorrect
4. DCorrect, provided management gives a written representation about subsequent events