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CMA Intermediate · Corporate Accounting and Auditing · Audit Engagement, Audit Program, Audit Documentation and Audit Evidence

Which of the following best describes the purpose of documenting the overall audit strategy under SA 300?

Documentation of the overall audit strategy records the key decisions needed to plan the audit properly and to communicate significant matters to the engagement team. It can be a memorandum on the overall scope, timing and conduct of the audit, and it does not substitute for the audit plan.

  1. AIt is a record of key decisions considered necessary to plan the audit properly and to communicate significant matters to the engagement teamCorrect
  2. BIt is a legal guarantee to the management that no material misstatement will remain
  3. CIt replaces the need to prepare an audit plan
  4. DIt is prepared only after the audit report is signed

Explanation

SA 300 says the documentation of the overall audit strategy is a record of key decisions needed to plan the audit properly and to communicate significant matters to the engagement team. It may take the form of a memorandum covering scope, timing and conduct. It does not replace the audit plan or follow the report.

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