Skip to content

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

Mehta & Co. is auditing Tapi Chemicals Ltd. for the first time. Which of the following is an additional planning consideration specific to an initial audit engagement under SA 300?

In an initial audit the auditor must plan procedures to obtain sufficient appropriate evidence on opening balances and consider communication with the predecessor auditor. Materiality, engagement terms and current-year evidence still need the new auditor's own work, so the other options are incorrect.

  1. AObtaining sufficient appropriate evidence about opening balances, including consideration of the predecessor auditor's communicationCorrect
  2. BDeciding not to apply materiality as the previous auditor has set it
  3. CSkipping the engagement letter since the appointment is by the shareholders
  4. DRelying entirely on the predecessor auditor's working papers for the current year's balances

Explanation

For an initial engagement, the auditor must plan to obtain sufficient appropriate evidence on opening balances and communicate with the predecessor auditor as required by ethics. Materiality must be set afresh, the engagement terms must be agreed, and current year balances need the auditor's own evidence.

Did you get it right without looking?

One question tells you little. A timed set on Audit Strategy, Audit Planning and Audit Programme shows your real accuracy, how long you take and where you lose marks.

Practise Audit Strategy, Audit Planning and Audit ProgrammeFree diagnostic mock

More Audit Strategy, Audit Planning and Audit Programme questions