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

While auditing Kaveri Textiles Ltd, CA Rohit completes his risk assessment procedures in the first week of the audit. He has not yet finalised the specific further audit procedures for receivables and fixed assets, but wants to start inventory observation immediately because the year-end count is approaching. Which statement best reflects the position under SA 300?

The auditor may begin further audit procedures for some areas, such as inventory observation, before planning all remaining procedures. Under SA 300 the audit plan develops over the course of the audit, and planning of specific further procedures depends on the outcome of the risk assessment procedures.

1. AHe cannot begin any further audit procedure until the audit plan is complete for every class of transactions, balances and disclosures
2. BHe may begin further audit procedures for some areas before planning all remaining procedures, because planning is developed over the course of the auditCorrect
3. CHe must first prepare a separate written audit plan for each financial statement area and get it approved by those charged with governance
4. DHe should treat the overall audit strategy as final and make no later changes to the nature, timing and extent of procedures