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

While auditing Kaveri Textiles Ltd, CA Meera completes her risk assessment procedures in March and finalises the overall audit strategy. She has not yet decided the nature, timing and extent of further audit procedures for trade receivables, because these depend on the risk assessment outcome. Meanwhile her team wants to begin inventory observation planning and some testing of fixed asset additions. Which view is consistent with SA 300?

The audit plan develops progressively during the audit. Risk assessment planning happens early, and the auditor may start further procedures for some areas before planning all remaining ones, because the plan is more detailed than the overall strategy and depends on risk assessment results.

1. AFurther audit procedures for any class of transactions cannot begin until the audit plan for all remaining areas is fully documented
2. BThe audit plan develops over the course of the audit, and the auditor may begin further procedures for some areas before planning all remaining further proceduresCorrect
3. CPlanning of risk assessment procedures must be deferred until the specific further audit procedures are finalised
4. DThe audit plan is less detailed than the overall audit strategy and so is prepared first