Page 53 - CA Final PARAM Digital Book.

Risks & procedures to be adopted.

QNO Documentation of Audit Strategy & Audit Plan Old Course – (N18R)
30.310 TITANIUM CNO—APSE.240 New course – (SM23)
CA. Nikita is conducting audit of a leading society engaged in promoting awareness regarding usefulness
of internet among the disadvantaged sections of society through easily understandable means and
methods. The society is also registered under FCRA, 2010 for receipt of foreign contributions. During the
course of audit, she embarked upon extensive procedures relating to verification of receipt of foreign
contributions to rule out “round-tripping” in comparison to procedures originally thought of. She is
documenting various procedures performed by her including relevant audit findings.

However, she doesn’t not feel need for putting into writing about how she planned the whole exercise.
Does she require refreshening of her knowledge?
OR
The auditor shall document:-
(i) The overall audit strategy; (ii) The audit plan; and (iii) Any significant changes made during the audit
engagement to the overall audit strategy or the audit plan, and the reasons for such changes.” Explain.
Answer ➢ Documenting the Audit Plan
The auditor shall document-The overall audit strategy; The audit plan; and Any significant
changes made during the audit engagement to the overall audit strategy or the audit plan, and the
reasons for such changes as under –
• Documentation of the overall audit strategy
The documentation of the overall audit strategy is a record of the key decisions
considered necessary to properly plan the audit and to communicate significant matters
to the engagement team. For example, the auditor may summarize the overall audit
strategy in the form of a memorandum that contains key decisions regarding the overall
scope, timing and conduct of the audit.

• Documentation of the audit plan
The documentation of the audit plan is a record of the planned nature, timing and extent
of risk assessment procedures and further audit procedures at the assertion level in
response to the assessed risks. It also serves as a record of the proper planning of the
audit procedures that can be reviewed and approved prior to their performance. The
auditor may use standard audit programs and/or audit completion checklists, tailored as
needed to reflect the particular engagement circumstances.

• Record of the significant changes:
A record of the significant changes to the overall audit strategy and the audit plan, and
resulting changes to the planned nature, timing and extent of audit procedures, explains
why the significant changes were made, and the overall strategy and audit plan finally
adopted for the audit. It also reflects the appropriate response to the significant changes
occurring during the audit.

Conclusion:
Not documenting the audit plan will lead to non-compliance with SA 300 and affect audit quality. Changes
to the audit plan, especially those related to foreign contributions verification, should be documented with
reasons.

QNO Understanding nature of business New Course – (SM23)
30.315 TITANIUM CNO-- APSE.280
XWL Limited was engaged in dealing in commodity futures trading based in Surat. CA P, based at Delhi,
was auditor of the company. The auditor did not even once visit office of the company and failed to
understand the nature of business of the company. All the papers and account books were received on
emails and audit was concluded.
There were also included in his working papers checklists which had a requirement of test checking of
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