Document ID: chunk:federal_register_of_legislation:F2023C01129:reg:11:p2
Version: federal_register_of_legislation:F2023C01129
Segment Type: reg
Provision Reference: reg 11 (pt 2/12)
Character Range: 11801–15086

is written in the context of recurring audits.  Additional considerations in an initial audit engagement are separately identified.

      2. Planning an audit involves establishing the overall audit strategy for the engagement and developing an audit plan.  Quality management at the engagement level in accordance with ASA 220, in conjunction with adequate planning in accordance with this ASA, benefits the audit of a financial report in several ways, including the following:  (Ref: Para. A1‑A4)

           * Helping the auditor to devote appropriate attention to important areas of the audit.

           * Helping the auditor identify and resolve potential problems on a timely basis.

           * Helping the auditor properly organise and manage the audit engagement so that it is performed in an effective and efficient manner

           * Assisting in the selection of engagement team members with appropriate levels of capabilities and competence to respond to anticipated risks, and the proper assignment of work to them.

           * Facilitating the direction and supervision of engagement team members and the review of their work.

           * Assisting, where applicable, in coordination of work done by auditors of components and experts.

Effective Date

3.                   [Deleted by the AUASB.  Refer Aus 0.3]

Objective

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

Requirements

Involvement of Key Engagement Team Members

5.                   The engagement partner and other key members of the engagement team shall be involved in planning the audit, including planning and participating in the discussion among engagement team members.  (Ref: Para. A5)

Preliminary Engagement Activities

6.                   The auditor shall undertake the following activities at the beginning of the current audit engagement:

(a)                Performing procedures required by ASA 220 regarding the acceptance and continuance of the client relationship and audit engagement;[1]

(b)                Evaluating compliance with relevant ethical requirements, including those related to independence, in accordance with ASA 220;[2] and

(c)                Establishing an understanding of the terms of the engagement, as required by ASA 210.[3]  (Ref: Para. A6‑A8)

Planning Activities

7.                   The auditor shall establish an overall audit strategy that sets the scope, timing and direction of the audit, and that guides the development of the audit plan.

8.                   In establishing the overall audit strategy, the auditor shall consider the information obtained from complying with the requirements of ASA 220 and:

(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 auditor's professional judgement, are significant in directing the engagement team's efforts;

(d)                Consider the results of preliminary engagement activities and, where applicable, whether knowledge gained on other engagements performed