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

Sundaram & Co., a CA firm, has been appointed auditor of Kaveri Textiles Ltd. for the first time. While drafting the audit plan, the engagement partner wants to know which document sets out the scope, timing and direction of the audit and guides the development of the more detailed audit plan. Which is correct under SA 300?

The overall audit strategy is the document that sets the scope, timing and direction of the audit and guides the detailed audit plan, as required by SA 300. The audit programme comes later and is more detailed, while representation letters and reports belong to the completion stage.

  1. AThe audit programme prepared by the audit assistants after fieldwork
  2. BThe overall audit strategyCorrect
  3. CThe management representation letter
  4. DThe auditor's report draft

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 development of the audit plan. The audit programme is a detailed set of procedures that follows from the plan, so it is not the document that guides the plan. The representation letter and report draft are obtained or prepared at completion.

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