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CA Intermediate · Auditing and Ethics · Audit Strategy, Audit Planning and Audit Programme

Auditor Kiran is finalising the audit plan for Deccan Steel Ltd. The plan includes the nature, timing and extent of planned risk assessment procedures and further audit procedures at the assertion level. A junior colleague argues that the audit plan is merely a list of audit procedures and that the audit programme and plan are identical. Which view is correct?

The audit plan is more detailed than the overall audit strategy and covers the nature, timing and extent of risk assessment and further audit procedures at assertion level, plus other procedures needed to comply with SAs. The audit programme lists detailed procedures for each area, so the two are not identical.

  1. AThe audit plan is more detailed than the overall audit strategy and covers risk assessment procedures, further audit procedures at assertion level and other procedures needed to comply with SAs, whereas the audit programme details the procedures for each areaCorrect
  2. BThe audit plan and audit programme are identical and interchangeable documents in every respect
  3. CThe audit plan is prepared by management and the audit programme by the auditor
  4. DThe audit plan is prepared after the audit report is signed to record work done

Explanation

Under SA 300, the audit plan is more detailed than the overall audit strategy and includes the nature, timing and extent of risk assessment procedures, further audit procedures at assertion level, and other procedures to comply with SAs. The audit programme sets out detailed procedures for specific areas. They are related but not identical. Both are prepared by the auditor, before the work is performed.

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