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

Sharma & Co. has been appointed auditor of Kaveri Textiles Ltd. for the first time. The partner has asked the team to prepare a document setting out the nature, timing and extent of the planned risk assessment procedures and further audit procedures, to be used as the detailed guide for the engagement team. Which document does this describe?

The document is the audit programme, because it lays out in detail the nature, timing and extent of the planned procedures for the team to follow. The overall audit strategy only fixes scope, timing and direction, so it is less detailed than what the partner asked for.

  1. AOverall audit strategy
  2. BAudit programmeCorrect
  3. CManagement representation letter
  4. DEngagement letter

Explanation

The audit plan is more detailed than the overall audit strategy and sets out the nature, timing and extent of planned risk assessment and further audit procedures. The audit programme is the detailed set of procedures the team follows. The overall audit strategy only sets the scope, timing and direction of the audit, so it is wrong here.

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