Document ID: chunk:federal_register_of_legislation:F2023C01129:reg:11:p6
Version: federal_register_of_legislation:F2023C01129
Segment Type: reg
Provision Reference: reg 11 (pt 6/12)
Character Range: 23325–26257

are expected to take place (for example, on‑site or off‑site).

A10.         ASA 220 contains requirements and guidance on engagement resources and engagement performance (including direction and supervision of the members of the engagement team and the review of their work).

A11.         Appendix 1 lists examples of considerations in establishing the overall audit strategy.

A12.         Once the overall audit strategy has been established, an audit plan can be developed to address the various matters identified in the overall audit strategy, taking into account the need to achieve the audit objectives through the efficient use of the auditor's resources.  The establishment of the overall audit strategy and the detailed audit plan are not necessarily discrete or sequential processes, but are closely inter‑related since changes in one may result in consequential changes to the other.

Considerations Specific to Smaller Entities

A13.         In audits of small entities, the entire audit may be conducted by a very small audit team.  Many audits of small entities involve the engagement partner (who may be a sole practitioner) working with one engagement team member (or without any engagement team members).  With a smaller team, co‑ordination of, and communication between, team members are easier.  Establishing the overall audit strategy for the audit of a small entity need not be a complex or time‑consuming exercise; it varies according to the size of the entity, the complexity of the audit, and the size of the engagement team.  For example, a brief memorandum prepared at the completion of the previous audit, based on a review of the working papers and highlighting issues identified in the audit just completed, updated in the current period based on discussions with the owner‑manager, can serve as the documented audit strategy for the current audit engagement if it covers the matters noted in paragraph 8.

The Audit Plan (Ref: Para. 9)

A14.         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.  For example, planning of the auditor's risk assessment procedures occurs early in the audit process.  However, planning the nature, timing and extent of specific further audit procedures depends on the outcome of those risk assessment procedures.  In addition, the auditor may begin the execution of further audit procedures for some classes of transactions, account balances and disclosures before planning all remaining further audit procedures.

A15.         Determining the nature, timing and extent of planned risk assessment procedures, and the further audit procedures, as they relate to disclosures is important in light of both the wide