Strategy & Plan

Question 1

Audit Plan should include specific description of…

Answer 1

nature, timing & extent of:

• RISK ASSESSMENT PROCEDURES
• further A Procedures
  (What procedures are you be carried out
  Who should do them, how much work should be done - sample sizes etc
  When the work should be done - interim v final)

Question 2

Audit Strategy

Resources

Reporting obj & communication

Preliminary Engagm Activities & knowledge gained on other E’s

characteristics of Engagement

Answer 2

RESOURSES

• budget
• selection of audit team

REPORTING OBJ & communication

• timetable for reporting
• communication with client, among team, with 3rd parties

PRELIMINARY ENGAGEMENT ACTIVITIES & knowledge gainer other E’s

• Materiality
• Assessed risk of material misstatement
• need for Prof scepticism
• internal controls
• changes to L&Reg a/c standards

CHARACTERISTICS of E
Timing of a work
Availability of client staff

CAAT
Serv org
Int A Function
Knowledge of business
FRFramework

Question 3

For an INITIAL audit What 7 factors should be considered in addition to planning procedures which are carried out for reciting audits

Answer 3

PrEDECESSOR AUDITOR- arrangms made with to Review their Working papers

A procedures to obt S& approp evidence re OPENING BALANCES should be planned (in accord with ISA 510 initial a engagements)

MATTERS which were DISCUSSED With MANAGEMENT in connection with appointment - considered eg signif a/c policies which may affect planned a strategy

QUALITY C PROCEDURES increased ( eg involvement another partner to review overall a strategy prior to commencing signif a procedures & EQCR

Additional TIME & RESOURCES req’d in 1st yr of audit new client to obt knowledge of client ( eg docm int control system for 1st time, understanding business)

Increased TESTS of DETAIL reqd (as difficult place reliance on analytical procedures as source of substantive a evidence as these require knowledge & experience of client to set approp expectations)

Given increases risk of initial EEXPERIENCED a TEAM - to reduce detection risk

Question 4

ISA 315 assessing risk of mat misstatement thru understanding client, & it’s
environment
Stated objective of auditor is to…

Answer 4

Identify & assess risks of material misstatement (fraud/error) @ fs assertion level through understanding entity, environment & int controls

Question 5

ISA 330 A’s response to assessed risk states a objective is to…

Answer 5

Obt s& approp E

Re. Assessed risk of material misstatement

Thru Designing & implementing approp responses to risks