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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Planning, materiality and assessing the risk of material misstatement

At the planning stage of Orchard Media's audit, the engagement partner holds a team discussion on the susceptibility of the financial statements to material misstatement. Which matter does ISA 315 (Revised 2019) require to be covered?

The team discussion must cover the entity's applicable financial reporting framework and how susceptible its financial statements are to material misstatement, whether through fraud or error. Fees, staff pay and the final wording of the report are not required subjects of this planning discussion.

  1. AThe applicable financial reporting framework and the entity's susceptibility to material misstatement due to fraud or errorCorrect
  2. BThe partner's fee level and the firm's profit target for the engagement
  3. CManagement's remuneration policy for audit staff
  4. DThe final wording of the auditor's report

Explanation

ISA 315 requires an engagement team discussion on the susceptibility of the entity's financial statements to material misstatement and application of the financial reporting framework, with ISA 240 also requiring a fraud focus. Fees, staff remuneration and report wording are not required topics at this stage.

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