Audit Strategy

Question 1

STD

Answer 1

Frame-work

Question 2

Consideration in Appendix isa300

Answer 2

Question 3

Additional points

Question 4

UCT - POINTS
SCOPE

Answer 4

The scope of an audit is range of activities covered by that audit. Factors that will affect the scope of
an audit include:
* Whether the audit is statutory or voluntary audit
* Whether the client is listed
* The number of locations and components that need to be audited
* Whether other auditors will need to be involved (e.g. in a group environment where
subsidiaries and parents are audited by different parties)
* Whether the client has an internal audit function that can be relied upon
* Whether the client uses complex information technology systems
* Whether specialist knowledge is required

Question 5

TIMING

Answer 5

Factors that will affect the overall timing of the audit include:
* The company’s interim and year-end deadlines
* The client’s availability for meetings
* The size, complexity and number of locations of the client
* The extent and complexity of computerisation at the client

Question 6

Direction

Answer 6

The direction of an audit is the focus of the audit, e.g. which issues, balances and transactions the
auditor will focus on. Factors that will affect the direction of the audit include:
* The significant risks identified during the risk assessment procedures
* The materiality of different issues, balances and transactions
* Evidence of management’s commitment to a sound system of internal control
* Significant business developments and affecting the entity