PSA 300 Summary

8/18/2019 PSA 300 Summary

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PSA 300

Planning an audit of F/S

1. The auditor should plan the audit so that the engagement will be performed

in an eectie manner.

!inoles establishing the oerall audit strateg" for the engagement and

deeloping an audit plan# in order to reduce audit ris$ to an acceptabl" low leel.

!inoles the engagement partner and other $e" members of the engagement

team to bene%t from their e&perience and insight and to enhance the eectieness

and e'cienc" of the planning process.

!ensure that appropriate attention is deoted to important areas of the audit# that

potential problems are identi%ed and resoled on a timel" basis and that the audit

engagement is properl" organi(ed and managed

!assists in the proper assignment of wor$ to engagement team members#

facilitates the direction and superision of engagement team members and the

reiew of their wor$# and assists# where applicable# in coordination of wor$ done b"

auditors of components and e&perts.

). Preliminar" *ngagement Actiities

!Perform procedures regarding the continuance of the client relationship and the

speci%c audit engagement

!*aluate compliance with ethical re+uirements# including independence

!*stablish an understanding of the terms of the engagement

!ensure that the auditor plans an audit engagement for which,

-The auditor maintains the necessar" independence and abilit" to perform

the engagement.

-There are no issues with management integrit" that ma" aect the

auditors willingness to continue the engagement.


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-There is no misunderstanding with the client as to the terms of the

engagement.

3. The auditor should establish the oerall audit strateg" for the audit.

-etermining the characteristics of the engagement that de%ne its scope# such

-Ascertaining the reporting obecties of the engagement to plan the timing of the

audit and the nature of the communications re+uired as the %nancial reporting

framewor$ used

-onsidering the important factors that will determine the focus of theengagement

teams eorts

2. The auditor should deelop an audit plan for the audit in order to reduce audit

ris$ to an acceptabl" low leel.

!includes,

-the nature# timing and e&tent of planned ris$ assessment procedures

su'cient to assess the ris$s of material misstatement

-nature# timing and e&tent of planned further audit procedures at the

assertion leel for each material class of transactions# account balance# and

disclosure

. The oerall audit strateg" and the audit plan should be updated and changed as

necessar" during the course of the audit.

!As a result of une&pected eents# changes in conditions# or the audit eidence

obtained from the results of audit procedures# the auditor ma" need to modif" the

oerall audit strateg" and audit plan# and thereb" the resulting planned nature#

timing and e&tent of further audit procedures.


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4. The auditor should plan the nature# timing and e&tent of direction and superision

of engagement team members and reiew of their wor$.

!As the assessed ris$ of material misstatement increases# for the area of audit ris$#

the auditor ordinaril" increases the e&tent and timeliness of direction and

superision of engagement team members and performs a more detailed reiew of

their wor$.

5. The auditor should document the oerall audit strateg" and the audit plan#

including an" signi%cant changes made during the audit engagement.

!records the $e" decisions considered necessar" to properl" plan the audit and tocommunicate signi%cant matters to the engagement team.

!su'cient to demonstrate the planned nature# timing and e&tent of ris$

assessment procedures# and further audit procedures

!an" signi%cant changes to the originall" planned oerall audit strateg" and to the

detailed audit plan includes the reasons for the signi%cant changes and the

auditors response to the eents# conditions# or results of audit procedures that

resulted in such changes.

!Although discussions with those charge with goernance often occur# the oerall

audit strateg" and the audit plan remain the auditors responsibilit".

6. Additional onsiderations in 7nitial Audit *ngagements

--The auditor should perform the following actiities prior to starting an initial

audit,

8a9 Perform procedures regarding the acceptance of the client relationship

and the speci%c audit engagement

8b9 ommunicate with the preious auditor# where there has been a change

of auditors# in compliance with releant ethical re+uirements.

Documents

PSA 300 Summary