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audit pan

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › audit pan

  • This topic has 3 replies, 2 voices, and was last updated 12 months ago by Kim Smith.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • June 30, 2021 at 2:34 am #626651
    Noah098
    • Topics: 936
    • Replies: 352
    • ☆☆☆☆☆

    Which of the following is NOT part of the planning stage of
    the audit?
    A Preliminary materiality assessment
    B Risk assessment
    C Developing the audit strategy
    D Final analytical procedures

    ma’am my study text states that D is the answer. but i feel C should be correct too. This is because an audit strategy will always be made before audit plan, so how can audit plan include audit strategy?

    June 30, 2021 at 2:39 am #626652
    Noah098
    • Topics: 936
    • Replies: 352
    • ☆☆☆☆☆

    In fact i feel A should also be one of the answers too, because preliminary materiality assessment is done as a part of audit strategy already, so i feel it should not be repeated as a part of audit plan.

    June 30, 2021 at 2:40 am #626653
    Noah098
    • Topics: 936
    • Replies: 352
    • ☆☆☆☆☆

    ma’am can you pls explain why not C and A?

    June 30, 2021 at 7:45 am #626680
    Kim Smith
    Keymaster
    • Topics: 87
    • Replies: 6089
    • ☆☆☆☆☆

    Please remember to tell me the source of things you quote.

    “Audit planning” is the topic of an ISA (ISA 300 Planning an Audit of Financial Statements) – planning is a process that involves “establishing the overall audit strategy … AND developing an audit plan”. The strategy sets the scope, timing and direction of the audit guides the development of the more detailed audit plan. Planning activities include risk assessment – which is inextricably linked to materiality.

    So A, B and C are all part of the planning process (“stage”) – leaving only D which is NOT.

    Planning must include analytical procedures (as a risk assessment procedure) but this is not the same as the final (“overall”) analytical review – see Chapter 10.

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