Completion and Review - Test 1: answer key

Question 1 · 2 marks · Chapter 7: Completion and Review · medium

Scenario. M/s Sharma & Associates is the statutory auditor of Zenith Manufacturing Pvt Ltd for FY 2025-26. The financial statements were approved by the board on 12 June 2026 and the auditor's report was signed on 20 June 2026. The examined financial statements were made available to members and bankers on 8 July 2026. While completing subsequent-events procedures, the engagement team documented the following: (i) On 18 April 2026, Orion Retail, a customer owing ₹42 lakh at 31 March 2026, was declared insolvent; no provision had been made. (ii) On 12 May 2026, fire destroyed finished goods costing ₹65 lakh; insurers had not yet accepted the claim and the loss was not recorded. (iii) On 25 June 2026, before the report was provided to the entity, the auditor learnt that a legal claim filed in February 2026 had been settled for ₹18 lakh; no provision existed and management proposed only note disclosure. (iv) On 30 June 2026, the company signed a new supply contract expected to improve future revenue. Management contends that all four items are non-adjusting and wants no change to the signed statements. The engagement partner asks how SA 560 applies, including if management refuses amendment and the report has not yet been provided to the entity.

Which of the four documented items are adjusting events requiring adjustment in the financial statements for FY 2025-26?

1. Orion Retail's insolvency and the settlement of the legal claim, as both provide evidence of conditions existing at 31 March 2026. (correct answer)
2. The fire loss and the new supply contract, as both affect the entity's financial position before the audit report date.
3. Only Orion Retail's insolvency, because insolvency is the sole event that establishes a legal obligation at year-end.
4. All four items, because SA 560 requires every event before the report date to be recorded in the financial statements.

Answer: A — Orion Retail's insolvency and the settlement of the legal claim, as both provide evidence of conditions existing at 31 March 2026.

Explanation. SA 560 requires adjustment for events that provide evidence of conditions existing at the date of the financial statements. Orion's insolvency evidences recoverability of the receivable at year-end, and the legal settlement evidences the year-end provision estimate. The fire and new contract arose after year-end and are non-adjusting, requiring disclosure if material. Option d is a trap because SA 560 does not require adjustment for all subsequent events.

Where it goes wrong. Students often treat every event before the audit report as adjusting; the correct test is whether it evidences a year-end condition.

Authority. SA 560

Question 2 · 2 marks · Chapter 7: Completion and Review · hard

Management refuses to adjust the legal claim settlement, and the auditor's report dated 20 June 2026 has not yet been provided to the entity. What should the auditor do under SA 560?

1. Issue the already signed unmodified report because the report date precedes discovery of the settlement.
2. Withdraw from the engagement immediately and inform the bankers without modifying the report.
3. Modify the opinion as required by SA 705 before providing the auditor's report to the entity. (correct answer)
4. Take no action if the settlement is disclosed in the notes, as disclosure cures all subsequent-event misstatements.

Answer: C — Modify the opinion as required by SA 705 before providing the auditor's report to the entity.

Explanation. Under SA 560, if management does not amend the financial statements when the auditor believes amendment is needed, and the auditor's report has not yet been provided to the entity, the auditor shall modify the opinion as required by SA 705 and then provide the report. Option a ignores the post-report discovery; option d fails because an adjusting event requires adjustment, not mere disclosure.

Where it goes wrong. The trap is thinking that a signed report cannot be changed before delivery; SA 560 permits modification before the report is provided to the entity.

Authority. SA 560; SA 705

Question 3 · 2 marks · Chapter 7: Completion and Review · medium

How should the auditor treat the fire loss of ₹65 lakh and the new supply contract under SA 560?

1. Both require adjustment because they occurred before the financial statements were issued to members.
2. Both are non-adjusting events; material effects require disclosure, unless they affect the going concern assumption. (correct answer)
3. Both require only a written representation from management and no financial statement disclosure.
4. The fire loss is adjusting and the supply contract is non-adjusting, irrespective of materiality.

Answer: B — Both are non-adjusting events; material effects require disclosure, unless they affect the going concern assumption.

Explanation. Events that provide evidence of conditions arising after the reporting date are non-adjusting. The fire and the new supply contract arose after 31 March 2026 and do not affect year-end measurements. SA 560 requires disclosure where material, and the auditor must also consider going concern implications. Option a confuses the issuance date with the adjustment criterion.

Where it goes wrong. Students often use the audit report or issuance date as the dividing line for adjustment; the correct dividing line is the condition existing at year-end.

Authority. SA 560

Question 4 · 2 marks · Chapter 7: Completion and Review · hard

For the purpose of SA 560, what is the correct meaning of 'date the financial statements are issued' in this engagement?

1. It is always 31 March 2026, because that is the date of the financial statements.
2. It is necessarily the date the auditor's report is signed, namely 20 June 2026.
3. It is the date the board approves the financial statements, namely 12 June 2026.
4. It is the date the examined under statutory audit statements and report are made available to third parties, here 8 July 2026, being at or after the report date. (correct answer)

Answer: D — It is the date the examined under statutory audit statements and report are made available to third parties, here 8 July 2026, being at or after the report date.

Explanation. SA 560 defines the date the financial statements are issued as the date the auditor's report and examined financial statements are made available to third parties. It must be at or later than the auditor's report date and at or later than the date the report is provided to the entity. Here, 8 July 2026 fits. Option b confuses signing with issuance.

Where it goes wrong. The common pitfall is equating the report signing date with the issuance date; issuance relates to availability to third parties.

Authority. SA 560

Question 5 · 2 marks · Chapter 7: Completion and Review · medium

Scenario. M/s K. Mehta & Co. is auditing Suryodaya Sugar Mills Ltd for FY 2025-26. The company defaulted on a term loan of ₹18 crore, its current liabilities exceed current assets by ₹9 crore, operating cash flows are negative, and a key supplier has shifted to cash-on-delivery terms. Management prepared a cash flow forecast covering only nine months from the balance sheet date and refused to extend it to twelve months, citing the seasonal nature of the business. Management also declined to provide a written representation on the feasibility of its cost-cutting and loan-restructuring plans. The auditor concluded that use of the going concern basis was appropriate, but that a material uncertainty existed. The financial statements disclosed the principal events and management's plans, but omitted the statement that the entity may be unable to realise assets and discharge liabilities in the normal course of business. The partner is finalising the report and wants to know the consequences under SA 570 and SA 580, including whether refusal of the written representation automatically requires a disclaimer for all such matters.

Management's going concern assessment covers only nine months from the balance sheet date. What is the auditor's appropriate response under SA 570?

1. Accept the nine-month period because seasonal businesses are exempt from the twelve-month assessment requirement.
2. Request management to extend its assessment to at least twelve months and consider the report implications if it refuses. (correct answer)
3. Perform no further work because management has already prepared a cash flow forecast covering nine months.
4. Issue an adverse opinion automatically because any assessment below twelve months is inappropriate.

Answer: B — Request management to extend its assessment to at least twelve months and consider the report implications if it refuses.

Explanation. SA 570 requires the auditor to request management to extend its assessment to at least twelve months from the date of the financial statements if management's assessment covers less than twelve months. If management is unwilling, the auditor considers the implications for the report, including a qualified opinion or disclaimer. An adverse opinion is not automatic; it depends on the appropriateness of the going concern basis.

Where it goes wrong. Students may assume a short assessment automatically requires adverse opinion; SA 570 requires extension and then evaluation of evidence.

Authority. SA 570

Question 6 · 2 marks · Chapter 7: Completion and Review · hard

Assume the financial statements had adequately disclosed the material uncertainty. What report modification is required under SA 570?

1. An unmodified opinion with a separate section headed 'Material Uncertainty Related to Going Concern' drawing attention to the note. (correct answer)
2. A qualified opinion because any material uncertainty prevents an unmodified opinion from being expressed.
3. An adverse opinion because the going concern basis is inappropriate whenever a material uncertainty exists.
4. An unmodified opinion with an Emphasis of Matter paragraph instead of the going concern section.

Answer: A — An unmodified opinion with a separate section headed 'Material Uncertainty Related to Going Concern' drawing attention to the note.

Explanation. Where the going concern basis is appropriate, a material uncertainty exists, and adequate disclosure is made, SA 570 requires an unmodified opinion and a separate section under 'Material Uncertainty Related to Going Concern'. It is not an Emphasis of Matter paragraph. A qualified or adverse opinion is not required merely because a material uncertainty exists.

Where it goes wrong. Students often choose Emphasis of Matter or qualified opinion; SA 570 has a specific separate going concern section.

Authority. SA 570

Question 7 · 2 marks · Chapter 7: Completion and Review · medium

If the financial statements do not adequately disclose the material uncertainty, what should the auditor do under SA 570?

1. Express an unmodified opinion with a note in the Basis for Opinion section describing the uncertainty.
2. Disclaim an opinion automatically because non-disclosure of a material uncertainty always prevents any opinion.
3. Express a qualified or adverse opinion, as appropriate, and state the non-disclosure in the Basis for Opinion section. (correct answer)
4. Issue an unmodified opinion but add an Other Matter paragraph referring to the cash flow forecast.

Answer: C — Express a qualified or adverse opinion, as appropriate, and state the non-disclosure in the Basis for Opinion section.

Explanation. SA 570 requires a qualified or adverse opinion, as appropriate under SA 705, when adequate disclosure of a material uncertainty is not made. The Basis for Qualified (Adverse) Opinion section must state that a material uncertainty exists and is not adequately disclosed. Disclaimer is not automatic; it applies where the auditor cannot obtain sufficient evidence, not merely for inadequate disclosure.

Where it goes wrong. The trap is treating inadequate disclosure as automatically requiring a disclaimer rather than a qualified or adverse opinion.

Authority. SA 570; SA 705

Question 8 · 2 marks · Chapter 7: Completion and Review · hard

Management refuses to provide the written representation about the feasibility of its going concern plans. What is the most appropriate auditor response under SA 580?

1. Ignore the refusal because written representations are not audit evidence and are never required.
2. Issue a disclaimer automatically for all going concern matters, irrespective of other evidence obtained.
3. Treat the refusal as a scope limitation only if management also refuses access to the cash flow forecast.
4. Discuss the matter with management, re-evaluate management integrity, and determine the effect on the reliability of representations and the audit opinion. (correct answer)

Answer: D — Discuss the matter with management, re-evaluate management integrity, and determine the effect on the reliability of representations and the audit opinion.

Explanation. SA 580 requires the auditor to discuss a requested representation that is not provided, re-evaluate management integrity, and consider the effect on the reliability of representations and audit evidence generally. The auditor then determines the possible effect on the opinion under SA 705. This representation is not the fundamental management-responsibility representation, so refusal does not automatically require disclaimer.

Where it goes wrong. Students may think any refusal of written representation mandates disclaimer; SA 580 mandates disclaimer specifically for the fundamental management-responsibility representations.

Authority. SA 580; SA 705

Question 9 · 2 marks · Chapter 7: Completion and Review · medium

Scenario. A debtor owing ₹30 lakh at year-end is declared insolvent after the balance sheet date but before the auditor's report. No provision exists. The amount is material. What is the auditor's primary conclusion?

A debtor owing ₹30 lakh at year-end is declared insolvent after the balance sheet date but before the auditor's report. No provision exists. The amount is material. What is the auditor's primary conclusion?

1. It is an adjusting event requiring adjustment; if management refuses, the auditor should consider modification of the opinion. (correct answer)
2. It is a non-adjusting event requiring only disclosure because insolvency occurred in the next accounting period.
3. It is a subsequent event that affects only the next year's financial statements and not the current audit.
4. It requires no action because the auditor cannot predict customer insolvency after the year-end.

Answer: A — It is an adjusting event requiring adjustment; if management refuses, the auditor should consider modification of the opinion.

Explanation. SA 560 treats the insolvency of a major debtor after the reporting date as evidence of a condition existing at the reporting date, namely recoverability of the receivable. It is an adjusting event. If management does not adjust and the effect is material, the auditor considers modification under SA 705. It is not merely a disclosure event.

Where it goes wrong. Students often misclassify debtor insolvency as non-adjusting because the insolvency order was passed after year-end.

Authority. SA 560; SA 705

Question 10 · 2 marks · Chapter 7: Completion and Review · hard

Scenario. After the year-end but before the auditor's report, a company issues fresh equity shares to fund expansion. How should the auditor treat this event under SA 560?

After the year-end but before the auditor's report, a company issues fresh equity shares to fund expansion. How should the auditor treat this event under SA 560?

1. Require adjustment to share capital and cash as at the balance sheet date because the issue occurred before the report date.
2. Treat it as a non-adjusting event requiring disclosure if material, as it evidences a condition arising after year-end. (correct answer)
3. Ignore it completely because share issuance never affects the financial statements or disclosures.
4. Require an adverse opinion because post-year-end share issuance indicates the company was not a going concern.

Answer: B — Treat it as a non-adjusting event requiring disclosure if material, as it evidences a condition arising after year-end.

Explanation. Issue of new share capital after the reporting date is a standard example of a non-adjusting event under SA 560. It does not affect the financial position at year-end but may require disclosure if material. It does not automatically indicate going concern problems or require adjustment. The auditor ensures appropriate disclosure.

Where it goes wrong. The trap is assuming any event before the audit report date must be adjusted; non-adjusting events require disclosure, not adjustment.

Authority. SA 560

Question 11 · 2 marks · Chapter 7: Completion and Review · medium

Scenario. After the financial statements have been issued, the auditor discovers a fact that existed at the report date and would have caused amendment of the report. Management refuses to amend and does not inform recipients. What should the auditor do?

After the financial statements have been issued, the auditor discovers a fact that existed at the report date and would have caused amendment of the report. Management refuses to amend and does not inform recipients. What should the auditor do?

1. Perform a fresh full audit of the current year and issue an unmodified report without notifying anyone.
2. Take no action because the auditor has no obligation after the financial statements are issued.
3. Notify management and those charged with governance and take appropriate action to prevent reliance on the auditor's report. (correct answer)
4. Ask the bank to withdraw the financial statements from its records and ignore the matter thereafter.

Answer: C — Notify management and those charged with governance and take appropriate action to prevent reliance on the auditor's report.

Explanation. SA 560 states that although the auditor has no obligation to perform procedures after issuance, if a fact becomes known that would have caused amendment, the auditor discusses it with management, determines whether amendment is needed, and inquires how management will address it. If management does not take necessary steps, the auditor notifies management and those charged with governance and seeks to prevent reliance on the report.

Where it goes wrong. The phrase 'no obligation to perform procedures' is often misread as 'no duty to respond' after discovery.

Authority. SA 560

Question 12 · 2 marks · Chapter 7: Completion and Review · hard

Scenario. Management amends the financial statements only for a subsequent event and restricts its approval to that amendment. The auditor restricts subsequent-event procedures to the amendment. Which reporting approach is permitted by SA 560?

Management amends the financial statements only for a subsequent event and restricts its approval to that amendment. The auditor restricts subsequent-event procedures to the amendment. Which reporting approach is permitted by SA 560?

1. Issue the original report with the original date because only one event has changed.
2. Issue a new report dated earlier than the approval of the amended financial statements to preserve the original timeline.
3. Issue a new report without any reference to the restricted subsequent-event procedures.
4. Amend the report to include an additional date restricted to the amendment, or provide a new or amended report with an Emphasis of Matter or Other Matter paragraph. (correct answer)

Answer: D — Amend the report to include an additional date restricted to the amendment, or provide a new or amended report with an Emphasis of Matter or Other Matter paragraph.

Explanation. SA 560 permits the auditor to restrict subsequent-event procedures to the amendment where management validly restricts the amendment and approval. The auditor may add an additional date restricted to the amendment or provide a new or amended report with an Emphasis of Matter or Other Matter paragraph conveying the restriction. The new report cannot be dated earlier than approval of the amended statements.

Where it goes wrong. Students may think the original date always remains; SA 560 allows a dual-date or restricted-amendment approach.

Authority. SA 560

Question 13 · 2 marks · Chapter 7: Completion and Review · medium

Scenario. Which date is appropriate for a written representation letter obtained under SA 580?

Which date is appropriate for a written representation letter obtained under SA 580?

1. As near as practicable to, but not after, the date of the auditor's report. (correct answer)
2. Any date before the auditor's report, even several months earlier, because representations relate to the full year.
3. After the auditor's report date, so that management can confirm post-report events.
4. Exactly the date of the balance sheet, because representations concern the year-end position only.

Answer: A — As near as practicable to, but not after, the date of the auditor's report.

Explanation. SA 580 requires the date of written representations to be as near as practicable to, but not after, the date of the auditor's report. The auditor's opinion cannot be expressed before the date of the written representations. A representation dated after the report would be inconsistent with the completion sequence, while a very old date raises reliability concerns.

Where it goes wrong. Students may select the balance sheet date or a date after the report; SA 580 ties the representation date to the report date.

Authority. SA 580

Question 14 · 2 marks · Chapter 7: Completion and Review · hard

Scenario. New management took charge midway through the year and refuses to provide written representations for the earlier period under previous management. What is the correct position under SA 580?

New management took charge midway through the year and refuses to provide written representations for the earlier period under previous management. What is the correct position under SA 580?

1. The auditor should accept representations only for the period after new management took charge.
2. The representations must cover all periods referred to in the auditor's report; refusal may lead to disclaimer for the fundamental management-responsibility representations. (correct answer)
3. The auditor should obtain representations from the previous management instead, even without current management consent.
4. The auditor should ignore the refusal because written representations are not required when management changes during the year.

Answer: B — The representations must cover all periods referred to in the auditor's report; refusal may lead to disclaimer for the fundamental management-responsibility representations.

Explanation. SA 580 requires written representations for all financial statements and periods referred to in the auditor's report. New management is responsible for the financial statements as a whole, even for periods before it took charge. If it refuses to provide the fundamental representations about preparation and completeness, the auditor disclaims an opinion under SA 705.

Where it goes wrong. Students often accept a period limitation because the current management was not in office; SA 580 does not permit that limitation.

Authority. SA 580; SA 705

Question 15 · 2 marks · Chapter 7: Completion and Review · medium

Scenario. After evaluating uncorrected misstatements, the auditor concludes they are immaterial individually and in aggregate. What written representation should the auditor request under SA 450?

After evaluating uncorrected misstatements, the auditor concludes they are immaterial individually and in aggregate. What written representation should the auditor request under SA 450?

1. A representation that all misstatements have been corrected before the report is signed.
2. A representation that corrected misstatements are material but do not affect the audit opinion.
3. A representation that management believes the effects of uncorrected misstatements are immaterial, individually and in aggregate, with a summary attached. (correct answer)
4. A representation that uncorrected misstatements are disclosed only to the audit committee and not in the representation letter.

Answer: C — A representation that management believes the effects of uncorrected misstatements are immaterial, individually and in aggregate, with a summary attached.

Explanation. SA 450 requires the auditor to request a written representation from management and, where appropriate, those charged with governance that they believe the effects of uncorrected misstatements are immaterial, individually and in aggregate, to the financial statements as a whole. A summary of such items must be included in or attached to the representation.

Where it goes wrong. The trap is confusing corrected and uncorrected misstatements; SA 450 requires representation on uncorrected misstatements.

Authority. SA 450

Question 16 · 2 marks · Chapter 7: Completion and Review · hard

Scenario. Management is unwilling to make or extend its assessment of the entity's ability to continue as a going concern when requested by the auditor. What report implication may arise under SA 570?

Management is unwilling to make or extend its assessment of the entity's ability to continue as a going concern when requested by the auditor. What report implication may arise under SA 570?

1. An unmodified opinion is still required because going concern assessment is solely management's responsibility.
2. An adverse opinion is mandatory because unwillingness always proves the going concern basis is inappropriate.
3. No report modification is needed if the financial statements contain a note about liquidity risk.
4. A qualified opinion or a disclaimer of opinion may be appropriate because sufficient appropriate evidence may not be obtainable. (correct answer)

Answer: D — A qualified opinion or a disclaimer of opinion may be appropriate because sufficient appropriate evidence may not be obtainable.

Explanation. SA 570 states that if management is unwilling to make or extend its assessment when requested, the auditor considers the implications for the report. A qualified opinion or disclaimer may be appropriate because the auditor may not be able to obtain sufficient appropriate audit evidence regarding use of the going concern basis. Adverse opinion applies when the going concern basis is inappropriate, not merely because management refuses to assess.

Where it goes wrong. Students often jump to adverse opinion; refusal to assess is an evidence limitation that may lead to qualification or disclaimer.

Authority. SA 570

Question 17 · 2 marks · Chapter 7: Completion and Review · medium

Scenario. A material uncertainty related to going concern exists and is adequately disclosed. Which statement correctly describes the auditor's report under SA 570?

A material uncertainty related to going concern exists and is adequately disclosed. Which statement correctly describes the auditor's report under SA 570?

1. An unmodified opinion with a separate 'Material Uncertainty Related to Going Concern' section, not an Emphasis of Matter paragraph. (correct answer)
2. A qualified opinion because a material uncertainty is a scope limitation by its very nature.
3. An adverse opinion because the entity may not be able to continue as a going concern.
4. An unmodified opinion with no reference to the uncertainty because adequate disclosure is made in the notes.

Answer: A — An unmodified opinion with a separate 'Material Uncertainty Related to Going Concern' section, not an Emphasis of Matter paragraph.

Explanation. Where adequate disclosure is made, SA 570 requires an unmodified opinion and a separate section headed 'Material Uncertainty Related to Going Concern'. The section draws attention to the note and states that the auditor's opinion is not modified. It is not an Emphasis of Matter paragraph, nor does adequate disclosure eliminate the need to refer to the uncertainty.

Where it goes wrong. The common error is selecting Emphasis of Matter; SA 570 prescribes a separate going concern section.

Authority. SA 570

Question 18 · 2 marks · Chapter 7: Completion and Review · hard

Scenario. An auditor identifies a significant deficiency in internal control over related-party transactions. How should it be communicated under SA 265?

An auditor identifies a significant deficiency in internal control over related-party transactions. How should it be communicated under SA 265?

1. Only orally to the engagement partner, with no need to communicate to those charged with governance.
2. In writing to those charged with governance on a timely basis, including a description and potential effects, and also to management at an appropriate level. (correct answer)
3. Only in the audit report under the Basis for Opinion section because it affects the financial statements.
4. Only to the internal auditor, because internal control deficiencies are outside the scope of statutory audit communication.

Answer: B — In writing to those charged with governance on a timely basis, including a description and potential effects, and also to management at an appropriate level.

Explanation. SA 265 requires significant deficiencies in internal control to be communicated in writing to those charged with governance on a timely basis. The communication must describe the deficiencies and explain their potential effects and provide sufficient context. The auditor also communicates to management at an appropriate level of responsibility. Such deficiencies are not ordinarily reported in the audit report.

Where it goes wrong. Students may confuse internal control communication with audit report disclosure; SA 265 requires communication to TCWG and management.

Authority. SA 265

Question 19 · 2 marks · Chapter 7: Completion and Review · medium

Scenario. The auditor communicates significant audit findings orally to those charged with governance. What documentation is required under SA 260?

The auditor communicates significant audit findings orally to those charged with governance. What documentation is required under SA 260?

1. No documentation is required for oral communication if the auditor remembers the discussion.
2. Only a copy of the board minutes is required; the auditor need not document the communication.
3. The auditor must include the matters communicated orally in audit documentation, stating when and to whom they were communicated. (correct answer)
4. The auditor must issue a written communication in all cases, irrespective of professional judgement.

Answer: C — The auditor must include the matters communicated orally in audit documentation, stating when and to whom they were communicated.

Explanation. SA 260 requires that where matters required to be communicated are communicated orally, the auditor includes them in audit documentation, along with when and to whom they were communicated. Written communications require retaining a copy. Written communication is required for significant findings where oral communication would not be adequate, and for independence matters in listed entities.

Where it goes wrong. Students may think oral communication needs no record; SA 260 requires documentation of oral communications.

Authority. SA 260

Question 20 · 2 marks · Chapter 7: Completion and Review · hard

Scenario. Management refuses to provide written representations confirming it has fulfilled its responsibility for preparation of the financial statements and for completeness of information and transactions. What is the auditor's required action under SA 580?

Management refuses to provide written representations confirming it has fulfilled its responsibility for preparation of the financial statements and for completeness of information and transactions. What is the auditor's required action under SA 580?

1. Issue an unmodified opinion if other audit evidence is available, because written representations are only corroborative.
2. Issue a qualified opinion because refusal is always a disagreement with management.
3. Withdraw from the engagement without considering any report modification.
4. Disclaim an opinion on the financial statements in accordance with SA 705. (correct answer)

Answer: D — Disclaim an opinion on the financial statements in accordance with SA 705.

Explanation. SA 580 requires the auditor to disclaim an opinion where management does not provide the written representations about its responsibilities for preparation of the financial statements and about information provided and completeness of transactions, or where the auditor concludes there is sufficient doubt about management integrity such that those representations are unreliable. Other audit evidence does not cure this specific statutory-standard requirement.

Where it goes wrong. Students may think other evidence can substitute for the fundamental management-responsibility representations; SA 580 mandates disclaimer.

Authority. SA 580