Skip to content

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

Meridian & Co., Chartered Accountants, have been appointed auditors of Kaveri Textiles Ltd. for the first time. The audit partner wants to finalise the overall audit strategy. Under SA 300, which of the following is the most appropriate step regarding the timing of the work?

The auditor should establish the overall audit strategy, covering scope, timing and communications, before detailed procedures begin. SA 300 requires planning to be done at the start and to guide the audit plan. It applies to all audits and is not left to management or done afterwards.

  1. APrepare the overall audit strategy only after the audit fieldwork is substantially complete, so that actual findings can be reflected
  2. BEstablish the overall audit strategy, including the timing of the audit and the nature of communications required, before detailed procedures beginCorrect
  3. CLeave the timing of the audit entirely to the client's management, since they know when records will be ready
  4. DSkip the audit strategy because it is required only for audits of listed companies

Explanation

SA 300 requires the auditor to establish an overall audit strategy that sets the scope, timing and direction of the audit and guides the audit plan. It is prepared at the start of the engagement, not after fieldwork. Option A reverses the sequence, and option D is wrong because SA 300 applies to all audits.

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