Question Tag: ISA 300

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  • 15 Marks

AAA – Nov 2021 – L3 – Q6 – Audit of IT Systems and Data Analytics

Outline application controls for computerised systems and develop an audit strategy following ISA 300 for large, computerised clients.

The firm you work for has considered the growing development in some sectors of the economy and the opportunities this development portends.

Your firm is a sole practitioner, and though the partner has the skills and professional competences necessary to undertake big jobs, applications for big jobs have always been turned down.

To get involved and secure some of these big jobs, your partner has dialogued with some other sole practitioners who share the same view. They have agreed to operate a merged firm starting in the year 2022. Appropriate registration of the new practice name with the Corporate Affairs Commission and application for a license in the new name from the Institute are being processed. To prepare for securing and executing some of these big jobs, preparations are set to commence once the registrations are approved. Some of the target jobs involve computerised entities, so your partner has assigned you some preparatory tasks, as he is the lead partner.

Required:

a. Prepare a document showing the application controls that will be focused on in the computerised systems of the entities. (7 Marks)

b. Develop an appropriate audit strategy in accordance with ISA 300, “Planning an audit of financial statements.” (8 Marks)

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  • 20 Marks

AA – Nov 2014 – L2 – Q3 – Planning an Audit

Outline the importance of audit planning and develop an audit strategy for Hurricane Ltd.

Hurricane Limited

You are the audit manager in charge of the audit of Hurricane Limited. The company’s year-end is 31 December, and Hurricane Limited has been a client for seven years. The company purchases and resells fittings for ships, including anchors, compasses, rudders, sails, etc. Clients vary in size from small businesses making yachts to large companies maintaining large luxury cruise ships. No manufacturing takes place in Hurricane Limited.

Information on the company’s financial performance is available as follows:

Other Information:

i. The industry in which Hurricane Limited operates has seen moderate growth of 7% over the last year.

ii. Non-current assets mainly relate to company premises for storing inventory. Ten delivery vehicles are owned with a net book value of ₦300,000.

iii. One of the directors purchased a yacht during the year.

iv. Inventory is stored in ten different locations across the country, with your firm again having offices close to seven of those locations.

v. A computerized inventory control system was introduced in August 2013.

vi. Inventory balances are now obtainable directly from the computer system. The client does not intend to count inventory at the year-end but relies instead on the computerized inventory control system.

Required:

a. ISA 300 Planning an Audit of Financial Statements, states that an auditor must plan the audit.
Explain why it is important to plan an audit. (5 Marks)

b. Using the information provided above, prepare the audit strategy for Hurricane Limited for the year ending 31 December 2014. (15 Marks)

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  • 20 Marks

AA – May 2022 – L2 – SB – Q3 – Planning an Audit

Discuss the benefits of audit planning, importance of maintaining audit quality, and procedures auditors should establish to ensure audit quality.

The objective of the auditor, according to ISA 300 – Planning an audit of financial statements, is to plan and perform an audit in an effective manner.

a. Explain the benefits of audit planning. (5 Marks)
b. Why is it important that audit firms should maintain the quality of their work? (5 Marks)
c. Explain the procedures a firm of auditors should establish internally to maintain the quality of its work. (10 Marks)

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  • 5 Marks

AA – Nov 2018 – L2 – Q4c – Planning an Audit

States the benefits of audit planning to the independent auditor, as required by ISA 300.

International Standards on Auditing, ISA 300 requires the Independent auditor to plan the audit of the financial statements so that the engagement will be performed in an effective manner.

Required:
State the benefits of audit planning to the independent auditor.

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  • 5 Marks

AA – Nov 2023 – L2 – Q1c – Planning and Approach for Audit and Assurance Engagements

Explain five benefits of planning an audit as per ISA 300.

ISA 300: Planning an audit of financial statements provides guidance to assist Auditors in planning an audit.

Required:
Explain FIVE (5) benefits of audit planning.
(5 marks)

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  • 15 Marks

AA – Nov 2019 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

Explaining the difference between audit strategy and audit plan, along with identifying the contents of both.

ISA 200: Overall Objectives of Independent Auditor and the Conduct of an Audit and ISA 300 – Planning an Audit of Financial Statements requires that auditors should plan in order to conduct the audit in an effective, efficient, and timely manner. The plan should include an overall audit strategy and a detailed audit plan.

Required:
i) Distinguish between audit strategy and audit plan. (5 marks)
ii) Identify the contents of audit strategy and audit plan. (10 marks)

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  • 9 Marks

AA – Mar 2023 – L2 – Q1c – Planning and Approach for Audit and Assurance Engagements

Explain the concept of audit planning and enumerate its benefits in conducting audit engagements.

Preparing an audit plan is the first stage in conducting an audit engagement. It has become necessary for audit firms to plan their audit engagements to avoid risks and other litigation issues. ISA 300: Planning an Audit of Financial Statements emphasizes the importance of audit planning in ensuring an effective audit.

Required:
i) Explain audit planning. (3 marks)
ii) Enumerate FOUR (4) benefits or importance of audit planning. (6 marks)

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  • 4 Marks

AA – Nov 2020 – L2 – Q2b – Planning and Approach for Audit and Assurance Engagements

Explain key items to include in an audit strategy document.

ISA 300: Planning an audit of financial statements requires auditors to establish the overall strategy for an audit. An auditor is required to plan the audit by developing an audit strategy to guide the plan itself. Audit planning is necessary for a number of reasons, the foremost of which is to achieve audit efficiency and effectiveness. Audit planning involves risk assessment procedures, further audit procedures, and other audit procedures to obtain sufficient appropriate audit evidence. During the audit, if an auditor concludes that the initial plan requires alteration, the auditor shall consider revising the audit strategy.

Required:
Explain with justification FOUR (4) key items that should be included in an audit strategy document.
(4 marks)

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  • 3 Marks

AA – May 2017 – L2 – Q3a – Planning and Approach for Audit and Assurance Engagements

Explanation of the importance of audit planning.

It has become necessary that audit firms plan their activities well in order to avoid risk and other litigation issues. ISA 300 Planning an Audit of Financial Statements states that the auditor must plan the audit.

Required:
Explain audit planning.

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  • 15 Marks

AA – Mar 2024 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

Distinguish between audit strategy and audit plan and identify their contents as required by ISA 200 and ISA 300.

ISA 200: Overall Objectives of Independent Auditor and the Conduct of an Audit and ISA 300: Planning an Audit of Financial Statements require that auditors should plan in order to conduct the audit in an effective, efficient, and timely manner. The plan should include an overall audit strategy and a detailed audit plan.

Required:
i) Clearly distinguish between audit strategy and audit plan. (5 marks)
ii) Identify the contents of audit strategy and audit plan. (10 marks)

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  • 15 Marks

AAA – Nov 2021 – L3 – Q6 – Audit of IT Systems and Data Analytics

Outline application controls for computerised systems and develop an audit strategy following ISA 300 for large, computerised clients.

The firm you work for has considered the growing development in some sectors of the economy and the opportunities this development portends.

Your firm is a sole practitioner, and though the partner has the skills and professional competences necessary to undertake big jobs, applications for big jobs have always been turned down.

To get involved and secure some of these big jobs, your partner has dialogued with some other sole practitioners who share the same view. They have agreed to operate a merged firm starting in the year 2022. Appropriate registration of the new practice name with the Corporate Affairs Commission and application for a license in the new name from the Institute are being processed. To prepare for securing and executing some of these big jobs, preparations are set to commence once the registrations are approved. Some of the target jobs involve computerised entities, so your partner has assigned you some preparatory tasks, as he is the lead partner.

Required:

a. Prepare a document showing the application controls that will be focused on in the computerised systems of the entities. (7 Marks)

b. Develop an appropriate audit strategy in accordance with ISA 300, “Planning an audit of financial statements.” (8 Marks)

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  • 20 Marks

AA – Nov 2014 – L2 – Q3 – Planning an Audit

Outline the importance of audit planning and develop an audit strategy for Hurricane Ltd.

Hurricane Limited

You are the audit manager in charge of the audit of Hurricane Limited. The company’s year-end is 31 December, and Hurricane Limited has been a client for seven years. The company purchases and resells fittings for ships, including anchors, compasses, rudders, sails, etc. Clients vary in size from small businesses making yachts to large companies maintaining large luxury cruise ships. No manufacturing takes place in Hurricane Limited.

Information on the company’s financial performance is available as follows:

Other Information:

i. The industry in which Hurricane Limited operates has seen moderate growth of 7% over the last year.

ii. Non-current assets mainly relate to company premises for storing inventory. Ten delivery vehicles are owned with a net book value of ₦300,000.

iii. One of the directors purchased a yacht during the year.

iv. Inventory is stored in ten different locations across the country, with your firm again having offices close to seven of those locations.

v. A computerized inventory control system was introduced in August 2013.

vi. Inventory balances are now obtainable directly from the computer system. The client does not intend to count inventory at the year-end but relies instead on the computerized inventory control system.

Required:

a. ISA 300 Planning an Audit of Financial Statements, states that an auditor must plan the audit.
Explain why it is important to plan an audit. (5 Marks)

b. Using the information provided above, prepare the audit strategy for Hurricane Limited for the year ending 31 December 2014. (15 Marks)

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  • 20 Marks

AA – May 2022 – L2 – SB – Q3 – Planning an Audit

Discuss the benefits of audit planning, importance of maintaining audit quality, and procedures auditors should establish to ensure audit quality.

The objective of the auditor, according to ISA 300 – Planning an audit of financial statements, is to plan and perform an audit in an effective manner.

a. Explain the benefits of audit planning. (5 Marks)
b. Why is it important that audit firms should maintain the quality of their work? (5 Marks)
c. Explain the procedures a firm of auditors should establish internally to maintain the quality of its work. (10 Marks)

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  • 5 Marks

AA – Nov 2018 – L2 – Q4c – Planning an Audit

States the benefits of audit planning to the independent auditor, as required by ISA 300.

International Standards on Auditing, ISA 300 requires the Independent auditor to plan the audit of the financial statements so that the engagement will be performed in an effective manner.

Required:
State the benefits of audit planning to the independent auditor.

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  • 5 Marks

AA – Nov 2023 – L2 – Q1c – Planning and Approach for Audit and Assurance Engagements

Explain five benefits of planning an audit as per ISA 300.

ISA 300: Planning an audit of financial statements provides guidance to assist Auditors in planning an audit.

Required:
Explain FIVE (5) benefits of audit planning.
(5 marks)

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  • 15 Marks

AA – Nov 2019 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

Explaining the difference between audit strategy and audit plan, along with identifying the contents of both.

ISA 200: Overall Objectives of Independent Auditor and the Conduct of an Audit and ISA 300 – Planning an Audit of Financial Statements requires that auditors should plan in order to conduct the audit in an effective, efficient, and timely manner. The plan should include an overall audit strategy and a detailed audit plan.

Required:
i) Distinguish between audit strategy and audit plan. (5 marks)
ii) Identify the contents of audit strategy and audit plan. (10 marks)

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  • 9 Marks

AA – Mar 2023 – L2 – Q1c – Planning and Approach for Audit and Assurance Engagements

Explain the concept of audit planning and enumerate its benefits in conducting audit engagements.

Preparing an audit plan is the first stage in conducting an audit engagement. It has become necessary for audit firms to plan their audit engagements to avoid risks and other litigation issues. ISA 300: Planning an Audit of Financial Statements emphasizes the importance of audit planning in ensuring an effective audit.

Required:
i) Explain audit planning. (3 marks)
ii) Enumerate FOUR (4) benefits or importance of audit planning. (6 marks)

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  • 4 Marks

AA – Nov 2020 – L2 – Q2b – Planning and Approach for Audit and Assurance Engagements

Explain key items to include in an audit strategy document.

ISA 300: Planning an audit of financial statements requires auditors to establish the overall strategy for an audit. An auditor is required to plan the audit by developing an audit strategy to guide the plan itself. Audit planning is necessary for a number of reasons, the foremost of which is to achieve audit efficiency and effectiveness. Audit planning involves risk assessment procedures, further audit procedures, and other audit procedures to obtain sufficient appropriate audit evidence. During the audit, if an auditor concludes that the initial plan requires alteration, the auditor shall consider revising the audit strategy.

Required:
Explain with justification FOUR (4) key items that should be included in an audit strategy document.
(4 marks)

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  • 3 Marks

AA – May 2017 – L2 – Q3a – Planning and Approach for Audit and Assurance Engagements

Explanation of the importance of audit planning.

It has become necessary that audit firms plan their activities well in order to avoid risk and other litigation issues. ISA 300 Planning an Audit of Financial Statements states that the auditor must plan the audit.

Required:
Explain audit planning.

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You're reporting an error for "AA – May 2017 – L2 – Q3a – Planning and Approach for Audit and Assurance Engagements"

  • 15 Marks

AA – Mar 2024 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

Distinguish between audit strategy and audit plan and identify their contents as required by ISA 200 and ISA 300.

ISA 200: Overall Objectives of Independent Auditor and the Conduct of an Audit and ISA 300: Planning an Audit of Financial Statements require that auditors should plan in order to conduct the audit in an effective, efficient, and timely manner. The plan should include an overall audit strategy and a detailed audit plan.

Required:
i) Clearly distinguish between audit strategy and audit plan. (5 marks)
ii) Identify the contents of audit strategy and audit plan. (10 marks)

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