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CS Professional · Internal and Forensic Audit · Internal Audit Engagements and Planning

While planning an initial audit of Sundaram Pharma Ltd, the engagement partner wants to expand planning because the firm has no prior experience with the entity. Which matter is listed in SA 300 as one that may be considered for initial audits?

SA 300 says that for initial audits the auditor may consider procedures necessary to obtain sufficient appropriate audit evidence regarding opening balances, in line with SA 510, along with arrangements with the predecessor auditor and quality control requirements, since the auditor lacks previous experience with the entity.

  1. AAudit procedures needed to obtain sufficient appropriate evidence on opening balancesCorrect
  2. BDropping the audit plan because the audit is a first-year one
  3. CReducing the overall audit strategy to cover only current-year transactions
  4. DDelegating all significant judgments to management

Explanation

SA 300 lists, for initial audits, arrangements with the predecessor auditor, major issues discussed with management on selection, procedures for opening balances (SA 510), and other quality control procedures. Ignoring planning or opening balances is not supported.

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