CA Final · Advanced Auditing, Assurance and Professional Ethics · Audit Planning, Strategy and Execution

During the audit of Kaveri Textiles Ltd, the auditor, CA Meera, completed her risk assessment procedures in April and began testing revenue transactions in May. The detailed procedures for inventory, which depend on the risk assessment outcome for that area, have not yet been fully designed. A senior asks whether she has breached SA 300 by starting work before the entire audit plan is finalised. What is the correct conclusion?

The auditor has not breached SA 300. Planning develops over the course of the audit, and further procedures for some areas may start before all remaining procedures are planned, because the nature, timing and extent of specific procedures depend on the risk assessment outcome.

1. AYes, no further audit procedure may begin until every procedure for all areas has been planned
2. BNo, the auditor may begin further audit procedures for some classes of transactions before planning all remaining further proceduresCorrect
3. CYes, because the audit plan must be completed before risk assessment procedures are performed
4. DNo, but only if the audit committee approves the start of fieldwork in writing