The document discusses the requirements and objectives of ISA 300 regarding planning an audit of financial statements. Some key points: - The objective is to plan the audit effectively by focusing on key risk areas and ensuring attention is paid to the correct areas. - The audit plan should include the overall audit strategy, timing, and direction as well as the audit procedures for high-risk areas. - Planning is dynamic and iterative - the audit plan should be updated as risks and conditions change. All changes must be documented. - Planning helps ensure the audit is properly organized, resources are effectively allocated, and work is properly supervised.

1. ISA 300ISA 300
PLANNING AN AUDIT OFPLANNING AN AUDIT OF
FINANCIAL STATEMENTSFINANCIAL STATEMENTS

2. INTRODUCTION TO ISA 300
ISA requires the auditor to plan the audit
•to ensure that attention is paid to the correct areas
• to ensure that the work is carried out in
an effective manner

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

4. KEY AREAS
• the overall audit strategy
• the audit plan

8. WHEN AUDIT PLANNING
TAKE PLACE?
• Planning should not be seen as a
discrete and separate part of the overall audit.
For example
with a review of issues that were discussed with
management, such as control deficiencies. Such
matters are relevant to the next year’s audit and need
to be considered when planning.

9. AUDIT STRATEGY
• The audit strategy is basically that how the audit is
going to take place
• The scope
• Timing
• Direction

10. CHANGES IN THE AUDIT PLAN
& STRATEGY
• Not fixed
• Should be updated when needed
For example, as a result of unexpected events, or changes
in conditions, the auditor may need to modify the
overall audit strategy and audit plan and thereby the
resulting planned nature, timing and extent of further
audit procedures, based on the revised consideration of
assessed risks.

11. DOCUMENTATION
• A record of every change
• Document is crucial
• Things are documented in different ways some use,
standardized audit programmes, others checklists.

12. DIRECTION,SUPERVISION &
REVIEW
• The audit plan should include supervision for high
quality audit
• Inadequate supervision and review can lead to the
audit team making errors,
• For example, selecting inappropriate items for
sampling, or failing to properly conclude on audit
procedures performed.
• The amount of detail of supervision in audit depend
on complexity & size of company

13. THE AUDIT PLAN
• Identify risk
• Reduce risk
• Determining the nature, timing and extent
• Work depend on size & complexity

14. PLANNING PROCEDURE
• Discussion among engagement partner
• Analytical procedure to be applied
• General understanding of the legal & regulatory
frame work
• Determination of materiality
• Involvement of specialists
• Performance of risk assessment procedures

15. ADEQUATE PLANNING
• Appropriate attention
• Potential problems
• Audit is properly organized
• Proper assignment of work
• Facilitating the direction and supervision
• Coordinating work done

16. PRELIMINARY ENGAGEMENT
• Performance procedures regarding the continuous of
the client relationship
• Evaluate compliance with ethical requirements
• Establish an understanding of the terms of the
engagement

17. REPORTING OBJECTIVES OF
THE ENGAGEMENTS
• It vary from audit to audit
For example,
Some entities have additional reporting requirements to
comply with corporate governance regulations or
industry requirements, and the auditor must
understand these requirements from the start of the
audit

18. CONSIDER THE RESULTS OF
PRELIMINARY ENGAGEMENTS
• This include initial assessments
• Risk identification
• Any events taken place last year
• The firm performed other services for example,
reviews of business plans or
cash flow forecasts.

19. ASCERTAINING THE NATURE
TIMING & EXTENT
• Effectively allocate resources
for example,
the use of specialists on particular areas of the audit, or
building a team of highly experienced auditors for a
potentially high risk audit engagement.

20. ADDITIONAL CONSIDERATION IN
INITIAL AUDIT ENGAGEMENT
• The ISA recognizes that for an initial audit
engagement, the auditor may need to
• Expand the planning.

21. CONCLUSION
• Planning is a dynamic process that may evolve during
the audit, and should always respond to changes in
the circumstances of the audited entity.
Adherence to the requirements of ISA 300 should result
in a
 well-focused audit, staffed by appropriate personnel,
performing relevant and
 appropriate audit procedures.

22. CASE STUDY
• A engineering company facing issues that there are
many products which are not in good condition and
are send to the supplier without knowing about there
condition.