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

Mistral Ltd is a long-standing audit client. The engagement partner wants to reduce time spent on planning by having the team reuse last year's audit plan without change. Which statement best reflects ISA 300 requirements?

Planning is a continual and iterative process, so the strategy and plan must be updated as necessary during the audit. Simply reusing last year's plan without considering current-year changes is inappropriate, and documentation is still required.

  1. AThe plan must be updated and changed as necessary during the course of the audit, because planning is a continual and iterative processCorrect
  2. BThe plan is fixed once approved by the engagement partner and may only be changed with the client's consent
  3. CThe plan need not be documented for continuing engagements
  4. DPlanning is a discrete phase that ends before fieldwork starts, so later changes are not permitted

Explanation

ISA 300 requires the auditor to update and change the overall strategy and audit plan as necessary during the audit, as planning is continual and iterative. Reusing last year's plan without considering current-year changes is inappropriate. Documentation of the strategy and plan is required, and client consent is not needed.

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