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Psa 300

This document discusses the auditor's responsibility to plan an audit of financial statements. It states that planning involves establishing an overall audit strategy and developing an audit plan. The auditor must involve key engagement team members and undertake preliminary engagement activities. The auditor is to establish an overall audit strategy that defines the scope, timing, and direction of the audit. Based on this, the auditor develops a detailed audit plan outlining risk assessment procedures and further audit procedures. The overall strategy and plan are documented and updated as needed during the audit engagement.

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Joanna Caballero
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613 views22 pages

Psa 300

This document discusses the auditor's responsibility to plan an audit of financial statements. It states that planning involves establishing an overall audit strategy and developing an audit plan. The auditor must involve key engagement team members and undertake preliminary engagement activities. The auditor is to establish an overall audit strategy that defines the scope, timing, and direction of the audit. Based on this, the auditor develops a detailed audit plan outlining risk assessment procedures and further audit procedures. The overall strategy and plan are documented and updated as needed during the audit engagement.

Uploaded by

Joanna Caballero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PLANNING AN AUDIT

OF FINANCIAL
STATEMENTS
PSA 300

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SCOPE OF THIS PSA


This Philippine Standard on Auditing (PSA) deals with the
auditors responsibility to plan an audit of financial statements.
Planning an audit involves establishing the overall audit
strategy for the engagement and developing an audit plan.

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Key engagement
team members
previous experience
with the entity

PLANNING

TIMING

PLANNING

NATURE

EXTENT
Changes in
circumstances that
occur during the
audit engagement

Size and Complexity


of the Entity

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OBJECTIVE
The objective of the auditor is to plan the audit so that it will be
performed in an effective manner.

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REQUIREMENTS

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Involvement of Key Engagement Team Members


Preliminary Engagement Activities
Planning Activities
Documentation
Additional Considerations in Initial Audit Engagements

Classified - Internal use

INVOLVEMENT OF KEY ENGAGEMENT


TEAM MEMBERS
The involvement of the engagement partner and other key
members of the engagement team in planning the audit draws on
their experience and insight, thereby enhancing the effectiveness
and efficiency of the planning process.

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REQUIREMENTS

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Involvement of Key Engagement Team Members


Preliminary Engagement Activities
Planning Activities
Documentation
Additional Considerations in Initial Audit Engagements

Classified - Internal use

PRELIMINARY ENGAGEMENT
ACTIVITIES
The auditor shall undertake the following activities at the beginning of the
current audit engagement:
a) Performing procedures required by PSA 220, Quality Control for Audits
of Historical Financial Information regarding the continuance of the
client relationship and the specific audit engagement;
b) Evaluating compliance with ethical requirements, including
independence, as required by PSA 220; and
c) Establishing an understanding of the terms of the engagement,
as required by PSA 210, Terms of Audit Engagements.
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REQUIREMENTS

://KBG

Involvement of Key Engagement Team Members


Preliminary Engagement Activities
Planning Activities
Documentation
Additional Considerations in Initial Audit Engagements

Classified - Internal use

PLANNING ACTIVITIES
Establish OVERALL AUDIT STRATEGY for:
a) Scope
b) Timing, and
c) Direction of the audit

d) Guides development of the audit plan


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PLANNING ACTIVITIES
In establishing the overall audit strategy, the auditor shall:
a) Identify the characteristics of the engagement that define its scope;
b) Ascertain the reporting objectives of the engagement to plan the timing of the
audit and the nature of the communications required;
c)

Consider the factors that, in the auditors professional judgment, are significant
in directing the engagement teams efforts;

d) Consider the results of preliminary engagement activities and, where


applicable, whether knowledge gained on other engagements performed by the
engagement partner for the entity is relevant; and
e) Ascertain the nature, timing and extent of resources necessary to perform the
engagement.
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PLANNING ACTIVITIES
Develop Audit Plan
a) The nature, timing and extent of planned risk assessment
procedures
b) The nature, timing and extent of planned further audit
procedures at the assertion level
c) Other planned audit procedures that are required to be carried
out so that the engagement complies with PSAs.
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PLANNING ACTIVITIES
Overall Audit Strategy VS. Audit Plan
The audit plan is more detailed than the overall audit strategy in
that it 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.
Take note!
The auditor shall update and change the overall audit strategy
and the audit plan as necessary during the course of the audit.
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REQUIREMENTS

://KBG

Involvement of Key Engagement Team Members


Preliminary Engagement Activities
Planning Activities
Documentation
Additional Considerations in Initial Audit Engagements

Classified - Internal use

14

DOCUMENTATION
The auditor shall document:
a) The overall audit strategy;
b) The audit plan; and
c) Any significant changes made during the audit engagement
to the overall audit strategy or the audit plan, and the reasons
for such changes.
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DOCUMENTATION
The overall audit strategy
The documentation of the overall audit strategy is a record of the
key decisions considered necessary to properly plan the audit and
to communicate significant matters to the engagement team.

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DOCUMENTATION
The audit plan
The documentation of the audit plan is a record of the planned
nature, timing and extent of risk assessment procedures and
further audit procedures at the assertion level in response to the
assessed risks. It also serves as a record of the proper planning of
the audit procedures that can be reviewed and approved prior to
their performance.

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REQUIREMENTS

://KBG

Involvement of Key Engagement Team Members


Preliminary Engagement Activities
Planning Activities
Documentation
Additional Considerations in Initial Audit
Engagements

Classified - Internal use

18

ADDITIONAL CONSIDERATIONS IN
INITIAL AUDIT ENGAGEMENTS
The auditor shall undertake the following activities prior to
starting an initial audit:
a) Performing procedures required by PSA 220 regarding the
acceptance of the client relationship and the specific audit
engagement; and
b) Communicating with the predecessor auditor, where there
has been a change of auditors, in compliance with relevant
ethical requirements.
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SUMMARY

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Documented

Audit Planning

Involve Key
Engagement Team
Members

Overall Audit
Strategy

Updated as necessary
during the course of
the audit

Audit Plan

Preliminary Engagement Activities


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Questions?

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