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CA Intermediate · Auditing and Ethics · Completion and Review

While auditing Kaveri Textiles Ltd for the year ended 31 March, the auditor, CA Menon, finishes fieldwork and is about to date his report. The management has not yet signed the financial statements and says approval will happen in two weeks. What is the correct audit response under SA 700 and SA 560?

The report must be dated no earlier than the date the financial statements are approved by those with authority and the auditor has obtained sufficient appropriate evidence. Dating it at the end of fieldwork is wrong because management has not yet taken responsibility for the statements.

  1. ADate the report on the day fieldwork ended, since evidence is already collected
  2. BDate the report with the date of the next Annual General Meeting
  3. CDate the report not earlier than the date on which the financial statements are approved by those with authority and sufficient appropriate evidence is obtainedCorrect
  4. DLeave the report undated and have management insert a date later

Explanation

The auditor's report cannot be dated earlier than the date on which the auditor has obtained sufficient appropriate audit evidence and those with recognised authority have asserted they have taken responsibility for the financial statements. Dating it at end of fieldwork (option A) is wrong because approval has not occurred. The AGM date and a management-inserted date are not valid.

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