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

Halden Logistics is a new audit client with a major ERP implementation during the year. The audit manager proposes to change the planned approach and rely less on testing controls and more on substantive procedures part-way through fieldwork because the new system proves unreliable. Which statement is consistent with ISA 300?

The auditor should update the overall strategy and audit plan as necessary during the audit, documenting significant changes and why they were made. Here, an unreliable ERP justifies shifting toward substantive procedures; the strategy is not fixed and resignation is not required.

  1. AThe auditor should update and change the overall strategy and audit plan as necessary during the audit, and document the significant changes and reasonsCorrect
  2. BThe strategy is fixed once approved and changes are not allowed until the next year's audit
  3. CThe plan may be changed but the change should not be documented to avoid confusion
  4. DThe auditor must resign if the planned approach needs to change

Explanation

ISA 300 requires the auditor to update and change the overall audit strategy and audit plan as necessary during the audit, for example due to unexpected events or results of procedures. Significant changes and the reasons for them are documented. It does not require resignation.

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