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CA Intermediate · Auditing and Ethics · Completion and Review

While auditing Kavya Textiles Ltd for FY 2025-26, the auditor completes substantive procedures on 20 May 2026. The financial statements are approved by the Board on 28 May 2026 and the auditor signs the report on 30 May 2026. Under SA 560, which date should the auditor ordinarily treat as the cut-off up to which subsequent events procedures must be performed?

The cut-off is 30 May 2026, the date of the auditor's report. SA 560 requires procedures to identify events between the balance sheet date and the report date that may need adjustment or disclosure, so earlier dates such as Board approval would leave a gap.

  1. A31 March 2026, the balance sheet date
  2. B20 May 2026, the date audit procedures were completed
  3. C28 May 2026, the date of Board approval
  4. D30 May 2026, the date of the auditor's reportCorrect

Explanation

SA 560 requires the auditor to perform procedures designed to identify events occurring between the date of the financial statements and the date of the auditor's report. The cut-off is therefore 30 May 2026. Using the Board approval date would miss events from 28 to 30 May.

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