Chapter 11 Completion and Review REVIEW QUESTIONS 11.1 According to ASA 560.A3 (ISA 560.A3), the auditor's report cannot be dated earlier than the date on which the auditor has obtained sufficient appropriate audit evidence on which to base the opinion on the financial report, including that those with the recognised authority have asserted that they have taken responsibility for that financial report. As a result, the date of the auditor's report cannot be earlier than the date of approval of the financial report by those charged with governance. 11.2 According to ASA 520.7 (ISA 520.7), if analytical procedures identify fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount, the auditor shall investigate such differences by: · enquiring of management and obtaining appropriate audit evidence relevant to management's responses · performing other audit procedures as are necessary in the circumstances. ATQ1 The auditor's responsibilities for subsequent events are split into three timeframes as follows. Events between balance date and date of auditor's report The auditor has a responsibility to apply sufficient appropriate audit procedures up until the date of the auditor's report to enable the auditor to determine whether all material adjusting events have been appropriately adjusted and non-adjusting events are appropriately disclosed in the financial report. Events subsequent to the date of the auditor's report but before the issue of the financial report The auditor has no responsibility to seek audit evidence to identify events after the auditor's report has been signed. However, where the auditor becomes aware of events that have a material effect on the financial report and the report has not yet been issued (sent to shareholders), he or she should discuss the matter with management and consider whether an amended financial report should be issued. Events subsequent to the issue of the financial report If material events come up or are brought to the auditor's attention after the financial report has been sent to shareholders, the auditor should discuss the matter with management. Where the decision is made to issue a new financial report, the auditor should perform procedures necessary to form an opinion on the revised financial report. The auditor should take steps to prevent users' reliance on a superseded financial report and auditor's report. 1
11.4 According to ASA 560.7 (ISA 560.7), the following procedure shall be carried out to identify relevant subsequent events. (a) Obtain an understanding of any procedures management has established to ensure that subsequent events are identified. (b) Enquire of management and, where appropriate, those charged with governance, as to whether any subsequent events have occurred that might affect the financial report. (c) Read minutes, if any, of the meetings, of the entity's owners, management and those charged with governance, that have been held after the date of the financial report, and enquire about matters discussed at any such meetings for which minutes are not yet available. (d) Read the entity's latest subsequent interim financial report, if any. 11.9