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

M/s Rao & Associates has been appointed auditor of Kaveri Textiles Ltd for the first time. The audit partner wants to record the overall approach to the audit, including the scope, timing and direction of the audit, so that the audit plan can be developed. Which document or step does this describe under SA 300?

The step described is establishing the overall audit strategy. Under SA 300 the strategy sets the scope, timing and direction of the audit and guides development of the detailed audit plan. The other options are completion-stage or narrower documents and do not set the overall approach.

  1. AThe overall audit strategyCorrect
  2. BThe management representation letter
  3. CThe audit programme for cash balances
  4. DThe auditor's report

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 detailed audit plan. A management representation letter is obtained near completion, an audit programme is a detailed set of procedures for a specific area, and the auditor's report is the final output.

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