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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Planning, materiality and assessing the risk of material misstatement

Under ISA 300, which of the following is a required step for the auditor when developing the overall audit strategy for a new engagement at Zephyr Co?

ISA 300 requires the auditor to identify the engagement's scope, reporting objectives, timing and communications, and to consider significant factors that direct the team's efforts. Client approval is not required, and materiality is set during planning, not after forming the opinion.

  1. AAscertain the reporting objectives, timing and communications, and consider the factors that are significant in directing the engagement team's effortsCorrect
  2. BObtain the client's approval of the overall audit strategy before fieldwork starts
  3. CComplete all further audit procedures before determining the nature of the engagement team resources
  4. DDefine performance materiality only after the audit opinion has been formed

Explanation

ISA 300 requires the auditor to determine characteristics of the engagement that define its scope, reporting objectives, timing and communications, and consider significant factors directing the team's efforts. Client approval of the strategy is not required, and materiality is set at planning and revised as needed, not after the opinion.

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