Page 35 - CA Inter Audit PARAM

CA Ravi Taori
The establishment of the overall audit strategy and the detailed audit plan are closely inter-related.
Explain.
OR
Once the overall audit strategy has been established, an audit plan can be developed to address the
various matters identified in the overall audit strategy Explain.
Answer Relationship between audit strategy and audit plan
• Audit strategy sets the broad overall approach to the audit whereas audit plan addresses the
various matters identified in the overall audit strategy.
• Audit strategy determines scope, timing and direction of audit. Audit plan describes how strategy
is going to be implemented.
• The audit plan is more detailed than the overall audit strategy that includes the nature, timing and
extent of audit procedures to be performed by engagement team members. Planning for these
audit procedures takes place over the course of the audit as the audit plan for the engagement
develops.
• Once the overall audit strategy has been established, an audit plan can be developed to address
the various matters identified in the overall audit strategy, taking into account the need to achieve
the audit objectives through the efficient use of the auditor’s resources.
• The establishment of the overall audit strategy and the detailed audit plan are not necessarily
discrete or sequential processes but are closely inter-related since changes in one may result in
consequential changes to the other.

Modification of the overall audit strategy and audit Old Course -- (N19R)
QNO plan
300.17
Bhaskar CNO SA300.140
As a result of unexpected events, changes in conditions, or the audit evidence obtained from the results

of audit procedures, the auditor may need to modify the overall audit strategy and audit plan. Explain.
➢ The auditor shall update and change the overall audit strategy and the audit plan as necessary
during the course of the audit.
➢ As a result of, changes in conditions, unexpected events, or the audit evidence obtained from the
results of audit procedures, the auditor may need to modify the overall audit strategy and audit
plan and thereby the resulting planned nature, timing and extent of further audit procedures,
based on the revised consideration of assessed risks. This maybe the case when information
comes to the auditor’ statant on that differs significantly from the information available when the
audit or planned the audit procedures.
For example, audit evidence obtained through the performance of sub statives procedures
may contradict the audit evidence obtained through tests of controls.

QNO Audit Plan (3 Types of Plan) Old Course -- (M22R/N23R/M24M)
300.23 Bhaskar CNO SA300.080
Engagement Partner CA Hitesh Kapur of Kapur and Associates wanted to develop an audit plan of
Sampurna Fabrics Ltd. Discuss the matters to be described in such an audit plan
OR
Auditor shall develop an audit plan that includes description of audit procedures. Specify requirements in
this regard.
The auditor shall develop an audit plan that shall include a description of :
(i) The nature, timing and extent of planned risk assessment procedures, as determined under SA 315
“Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and
Its Environment”.
(ii) The nature, timing and extent of planned further audit procedures at the assertion level, as
determined under SA 330 “The Auditor’s Responses to Assessed Risks”.
(iii) Other planned audit procedures that are required to be carried out so that the engagement
complies with SAs.
The audit plan is more detailed than the overall audit strategy that includes the nature, timing and
extent of audit procedures to be performed by engagement team members. Planning for these audit
procedures takes place over the course of the audit as the audit plan for the engagement develops.
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