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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 proceduresma’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?
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.
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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