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CS Professional · Compliance Management, Audit and Due Diligence · Audit Engagement

Sahyadri Textiles Ltd's auditor has finalised the overall audit strategy for the year. Midway through the audit, the auditor's colleague says that once a strategy is set, the detailed audit plan must be developed strictly afterwards and neither can influence the other. Which view is consistent with SA 300?

The overall audit strategy and the detailed audit plan are closely inter-related, not discrete or sequential. Under SA 300, a change in one may lead to consequential changes in the other, so the auditor can revisit both as the audit progresses.

  1. AThe strategy and the plan are closely inter-related, so changes in one may result in consequential changes to the otherCorrect
  2. BThe strategy is fixed at the start and can never be changed once the plan is prepared
  3. CThe plan is prepared first and the strategy is derived from it at the end of the audit
  4. DThe strategy and plan are discrete, strictly sequential processes with no link between them

Explanation

SA 300 states that establishing the overall audit strategy and the detailed audit plan are not necessarily discrete or sequential processes but are closely inter-related, because changes in one may cause consequential changes in the other. The other options wrongly treat them as isolated or fixed.

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