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

The auditor of Himalaya Pharma Ltd. is preparing the audit plan under SA 300. Which of the following correctly describes what the audit plan includes, as distinct from the overall audit strategy?

The audit plan describes the nature, timing and extent of planned risk assessment procedures and further audit procedures at the assertion level, along with other required procedures. SA 300 treats this as more detailed than the overall audit strategy, which sets only the broad scope, timing and direction of the audit.

  1. AA description of the nature, timing and extent of planned risk assessment procedures and further audit procedures at the assertion levelCorrect
  2. BThe scope, timing and direction of the audit in a broad, general sense
  3. CA decision on the final audit opinion to be expressed
  4. DA list of all related parties as supplied by the management

Explanation

SA 300 states the audit plan is more detailed than the strategy and includes the nature, timing and extent of planned risk assessment procedures and of further audit procedures at the assertion level, plus other planned procedures. The second option describes the overall audit strategy, which sets scope, timing and direction. The opinion is formed only at the end of the audit.

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