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

Kestrel Audit LLP is planning the audit of Brightwell Foods, a long-standing client. The engagement partner asks the team what the overall audit strategy should primarily set out. Which statement best describes the purpose of the overall audit strategy under ISA 300?

The overall audit strategy sets the scope, timing and direction of the audit and guides the detailed audit plan. Specific procedures are in the audit plan, while going concern conclusions and representations are completion matters, not part of the strategy.

  1. AIt sets the scope, timing and direction of the audit and guides development of the more detailed audit planCorrect
  2. BIt lists the specific audit procedures to be performed on each financial statement assertion
  3. CIt records the final conclusions reached on the going concern assumption
  4. DIt documents the written representations obtained from management at the end of the audit

Explanation

ISA 300 requires an overall audit strategy that sets the scope, timing and direction of the audit and guides the audit plan. The detailed nature, timing and extent of procedures belong in the audit plan, not the strategy. Going concern conclusions and representations arise at completion.

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