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

CA Imran is auditing Lakshmi Logistics Ltd. where management is sceptical of the audit plan and requests a copy of the detailed audit programme so that it can prepare its staff accordingly. Which view is correct under SA 300 regarding discussion of planning matters with those charged with governance and management?

The auditor may discuss elements of planning with management, but should not disclose detailed procedures, because that could make the audit too predictable and weaken its effectiveness. The overall responsibility for the strategy and plan stays with the auditor, not management.

  1. AThe auditor may discuss elements of planning with management, but must not compromise the effectiveness of the audit by making procedures too predictable, so detailed procedures should not be sharedCorrect
  2. BThe auditor must hand over the complete audit programme whenever management requests it
  3. CThe auditor must never communicate anything about planning to management or those charged with governance
  4. DThe auditor must obtain management's approval before finalising the audit plan

Explanation

SA 300 states that the auditor may discuss elements of planning with those charged with governance and entity management to facilitate conduct and management of the audit, but care is needed because detailed procedures, if disclosed, can make them too predictable and compromise effectiveness. Responsibility for the strategy and plan remains with the auditor, so management approval is not required.

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