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CS Professional · Compliance Management, Audit and Due Diligence · Audit Principles and Techniques

A CS in practice, acting as secretarial auditor, finalises the audit plan for Tapi Logistics Ltd. The team leader proposes: (i) the plan will be built on an understanding of the entity and its environment including internal control; (ii) responses to assessed risks will be designed to obtain sufficient appropriate audit evidence; (iii) professional skepticism will be maintained only during the final review. Which proposal departs from SA 200?

Only proposal (iii) departs from SA 200. The standard requires the auditor to exercise professional judgment and maintain professional skepticism throughout planning and performance, not merely at final review. Risk assessment based on understanding the entity and its internal control, and obtaining sufficient appropriate evidence, are both required.

  1. AOnly (iii), as skepticism and professional judgment must be maintained throughout planning and performanceCorrect
  2. BOnly (i), as understanding of internal control is not needed for risk assessment
  3. COnly (ii), as evidence need only be sufficient, not appropriate
  4. DBoth (i) and (ii), as risk assessment cannot rest on understanding of the entity

Explanation

SA 200 requires the auditor to exercise professional judgment and maintain professional skepticism throughout the planning and performance of the audit. It also requires risks to be assessed on an understanding of the entity and its environment including internal control, and evidence to be both sufficient and appropriate. So (i) and (ii) conform and only (iii) departs.

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