Page 51 - CA Final PARAM Digital Book.

Part 1- ASPE

QNO Overall Audit Strategy Old Course – (M06E, N09R, M13M, N13R, SM17, PM17, SM21,)
30.100 TITANIUM CNO—APSE.180 New Course – (SM23)
A & Co. was appointed as auditor of Great Airways Ltd. As the audit partner what factors shall be
considered in the development of overall audit plan?
OR
Designing an Audit Strategy is the backbone of the “Audit Planning” process Discuss.
OR
M/s Sodhi & Associates have been appointed as the auditor of Raheja Ltd engaged in the business of
manufacturing and export of handloom goods The partner of the firm explains to the audit team that the
formulation of audit strategy shall form the basis of audit planning to achieve the audit objectives in the
most effective and efficient manner As head of the audit team, narrate the steps involved in the
formulation of audit strategy.
OR
You have been appointed as auditor of Bahubali Ltd. for the first time. Enumerate the factors to be
considered while establishing an overall audit strategy and its benefits.
Answer First Alternative
➢ Overall audit strategy would involve-(R-CRPF)

• Determination of Characteristics of Audit: Identify the characteristics of the
engagement that define its scope.
• Reporting Objectives: Ascertain the reporting objectives of the engagement to plan
the timing of the audit and the nature of the communications required.
• Factors directing Team’s Efforts: Consider the factors that, in the auditor’s
professional judgment, are significant in directing the engagement team’s efforts.
• Preliminary Work: Consider the results of preliminary engagement activities and,
where applicable, whether knowledge gained on other engagements performed by the
engagement partner for the entity is relevant.
• Nature, timing and Resources: Ascertain the nature, timing and extent of resources
necessary to perform the engagement.
Author’s Note

Establishing Overall Audit Strategy (Overall plan, first step in planning) (R-CRPF)
R-Resources (Nature / Timing & Extent)

C-Characteristics of Assignment
R-Reporting & Communication
P-Preliminary Engagement Activities Results
F-Significant Factor
Note: Overall audit plan & Overall Audit strategy both are same. Overall Audit strategy is latest as per SA
300

& regularly asked in exams. Students are advised to focus on overall audit strategy & give answer as per
that.

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