AFM202 Lecture Notes - Lecture 3: Financial Statement
4 Jun 2018
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Questions on CAS 300
1. Why is it important to properly plan an audit?
• Adequate planning benefits the audit of financial statements in several ways, including the
following: (Ref: Para. A1-A3)
• Helping the auditor to devote appropriate attention to important areas of the audit.
• Helping the auditor identify and resolve potential problems on a timely basis.
• Helping the auditor properly organize and manage the audit engagement so that it is
performed in an effective and efficient manner.
• Assisting in the selection of engagement team members with appropriate levels of
capabilities and competence to respond to anticipated risks, and the proper assignment of
work to them.
• Facilitating the direction and supervision of engagement team members and the review of
their work.
• Assisting, where applicable, in coordination of work done by auditors of components and
experts.
2. Who is responsible for planning the audit?
• The engagement partner and other key members of the engagement
team shall be involved in planning the audit, including planning and
participating in the discussion among engagement team members.
3. What must an audit plan include?
• The auditor shall develop an audit plan that shall include a description of:
• The nature, timing and extent of planned risk assessment procedures, as determined
under CAS 315. 4
• The nature, timing and extent of planned further audit procedures at the assertion
level, as determined under CAS 330. 5
• Other planned audit procedures that are required to be carried out so that the
engagement complies with CASs. (Ref: Para. A12)
6. What factors can cause audit planning activities to vary across clients
or across time for the same client?
• The nature and extent of planning activities will vary according to the size and complexity of
the entity, the key engagement team members' previous experience with the entity, and
changes in circumstances that occur during the audit engagement.
7. When discussing components of the audit plan with management,
what must the auditor be careful to do?
• The auditor may decide to discuss elements of planning with the
entity's management to facilitate the conduct and management of
the audit engagement (for example, to coordinate some of the
planned audit procedures with the work of the entity's personnel).
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