CA Final · Advanced Auditing, Assurance and Professional Ethics · Audit Planning, Strategy and Execution

While auditing Kaveri Textiles Ltd, CA Meena completes risk assessment procedures in the first week. She has not yet finalised the detailed nature, timing and extent of further audit procedures for trade receivables, since these depend on the risk assessment outcome. Meanwhile, the team wants to begin inventory observation, for which risks are already assessed. Which view is correct under SA 300?

The auditor may begin some further audit procedures, such as inventory observation, before planning all remaining procedures, because planning specific further procedures depends on risk assessment outcomes and develops over the course of the audit. The audit plan need not be fully complete beforehand.

1. AThe audit plan must be fully completed for all areas before any further audit procedure is started
2. BPlanning of specific further audit procedures depends on the risk assessment outcome, and the auditor may begin some further procedures before planning all remaining onesCorrect
3. CFurther audit procedures cannot be planned at all after risk assessment procedures are completed
4. DThe audit plan is less detailed than the overall audit strategy and is prepared first