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CS Professional · Internal and Forensic Audit · Internal Audit Engagements and Planning

Rao & Associates is planning its first audit of Himalaya Foods Ltd. Which additional planning consideration for an initial audit is mentioned in SA 300?

SA 300 lists, among additional initial-audit considerations, making arrangements with the predecessor auditor, such as reviewing the predecessor's working papers, unless law or regulation prohibits it. Planning may need to be expanded, not reduced, because the auditor lacks previous experience with the entity.

  1. AArranging, unless prohibited by law or regulation, to review the predecessor auditor's working papersCorrect
  2. BEliminating audit procedures on opening balances because they were audited earlier
  3. CSkipping discussion of major issues raised with management at selection
  4. DReducing planning because no previous experience with the entity exists

Explanation

SA 300 notes that for initial audits the auditor may need to expand planning and may consider arrangements with the predecessor auditor, such as reviewing working papers, unless prohibited by law. Opening balance procedures (SA 510) are required, not removed, so the other options are wrong.

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