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

CA Anita is planning the audit of Ganga Steels Ltd., a client she has audited for several years. She wants to use the audit programme of the prior year with minor changes. Which statement best reflects the correct approach to the audit programme?

The prior-year programme can be a starting point, but it must be modified for the current year's risk assessment and any changes in the entity or its environment. An audit programme is always needed, and the auditor remains responsible for it rather than adopting one prepared by the client.

  1. AThe programme may be based on the prior year but must be modified for the current year's risk assessment and changes in the entityCorrect
  2. BThe programme must remain identical every year to ensure consistency
  3. CThe programme is not required if the auditor is experienced
  4. DThe programme should be prepared by the client's internal auditor and adopted without change

Explanation

An audit programme sets out the nature, timing and extent of planned procedures and must reflect the current risk assessment and changes in the entity or its environment. Prior-year programmes can be a starting point but not copied blindly. Experience does not remove the need for a programme, and responsibility cannot be delegated to the client's internal auditor.

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