CA Final Audit – Chapter 2 – Audit Planning, Strategy & Execution MCQs

SA 200 deals with which of the following?

What are the benefits of Planning in an Audit of Financial Statements

1. Attention to Important areas
2.Timely resolution of Potential Problems
3.Proper Organisation and Management of Audit Engagement.
4.Proper Selection of Engagement Team
5.Direction and Supervision of Engagement Team

Nature and Extent of Planning of Financial statements depends upon

Planning is not a _______ phase of an audit.

Planning is a _______ phase of an audit.

Which of the following is more detailed?

One of the engagement team member of A & co, a firm of Chartered Accountants, picked up for statutory audit of Sun Private Ltd, was involved in the process of planning of audit for the financial year ended 31 March, 2022. The audit for the financial year ended 31 March, 2021 was conducted by a different engagement team. However, the engagement team of Sun Private Ltd for the current year has got the industry experience. The audit team is confused during the planning work and would like to have your views on following points. Please advise by answering one of them.

Kshitij Private Ltd is a company based out of Kochi having operations primarily in Europe. Because of the nature of the operations of the company, it is required to prepare its financial statements as per International Standards for reporting to the local regulatory authorities over there. Since the business is based in Europe, the audit team is also required to visit the locations wherever the company has offices and is accordingly required to perform certain audit procedures over there. During the audit of this company for the financial year ended 31 March, 2022, the auditors, who had planned their work appropriately and had a large team for conducting the audit, were facing lot of challenges at various stages.They were also required to revisit their materiality level during the course of the work. However, at the time of final reviews when this was discussed with the Audit Partner (Audit Incharge), he was not convinced with the approach of the audit team wherein they reassessed their plans continuously resulting in waste of time. In this situation, please advise which one of the following would be correct.

M/s VJ limitedhaving its office at Bangalore and operations spread across Southern India, had a discussion with its statutory auditors regarding the audit plan and the timelines. In the past years, there have been significant delays in completion of audit work and the management wanted that for the current year, audit should get completed on time. For doing this, the audit team suggested that the information for the purpose of audit should be ready on time and only then the timelines as agreed can be achieved. On the basis of the discussions with the client & the auditors and internal discussions amongst the audit team members, a detailed audit programme was prepared by the audit team for the current year’s audit. But the audit team discussed that they will not document this audit programme till the completion of the audit work because at various stages, the work may require changes. If the audit team documents the audit programme then it would create problems later on at the time of assembly of the audit file wherein the audit team would have to show the changes made by them in the audit programme during the course of the audit. You are required to share your views in respect of this understanding and approach of the auditor.

CA Sam has already developed an audit strategy for Hitesh Ltd. While a detailed audit plan is being developed, she decided that materiality levels set earlier need to be lowered as weaknesses in the internal controls were highlighted in the internal audit report. Subsequently, a deviation from the audit strategy is felt necessary.How this has to be dealt with.

_____ is the auditor with responsibility for reporting on the financial
information of an entity

____________ is the Auditor with responsibility for reporting on the financial information of a component which is included in the financial information
audited by the principal auditor.

M/s. ABC and co was apponted as principal Auditor for A group, Which factors the auditor would consider the following before accepting his work as Principal auditor.

The auditor should plan his work so as to enable him to conduct

Statement (1): Audit techniques and audit procedures are one and the same thing.
Statement (2): Audit techniques refer to certain means and methods for collecting evidences.

Statement (1): Auditor as well as audit staff should not discuss the clients’ information with outsiders.
Statement (2): After examination, all vouchers must be stamped.
Statement (3): Audit team manager need not review and supervise the work done.

Which of the following are advantages of audit programme

The auditor shall develop an audit plan which includes

CA Sameer, after developing the audit strategy for Menka Ltd., develops an audit plan but finds a need to revise the materiality levels set earlier and therefore a deviation from the already set audit strategy is felt necessary. Choose the correct option

AJ Private Ltd is in the business of telecom and have significant operations across India predominantly in Northern India. The statutory auditors of the company have been continuing for the last 3 years and have been issuing clean report. For the financial year ended 31 March 2021, the statutory auditors commenced their work in March 2021 as per discussions with the management and with a plan to complete the audit by first week of May 2021. The audit team concluded the work as per the agreed timelines and the financial statements and audit report were signed on 5 May 2021 along with the engagement letter for the financial year ended 31 March 2021. In the given situation, please advise which of the following would be correct.

Which technique provides evidence to evaluate the effectiveness of the controls design and confirm that the controls have been placed in operation

The Auditor shall document which of the following

Reviewing the earlier audit programme is essential if

Overall Audit Strategy and Audit plan is responsibility of whom?

Audit plan starts from

Nature of planning vary according to which of the following?

Following activities are taken at the beginning of the current audit engagement

The auditor develop an audit plan that shall include a description of

Overall Audit strategy involve which of the following

Benefits of Overall Audit strategy includes

Major sources of obtaining information about the client’s business are

Factors to be considered in development of overall audit plan are

Objective of audit planning does not include what?

The auditor’s examination of the system of internal control should have three features which are _______

The auditor should review the financial statements of the past several years, audited by his predecessors specially those of the immediately preceding previous year. This would reveal to him about

Statement 1: Adequate planning benefits the audit of financial statements by giving Attention to Important areas
Statement 2: Proper Selection of Engagement Team can be benefiited by adequate planning of Financial statements.

Who should be involved in planning the audit

Acceptance and Continuance of Client Relationships and Audit Engagements are very important ___________

Planning the nature, timing and extent of specific further audit
procedures depends on the outcome of __________.

The auditor may need to modify the overall audit strategy and audit plan on account of