Home › CA Final › auditing › Audit Planning Strategy and Execution › A small audit firm has agreed to audit a large l…
A small audit firm has agreed to audit a large listed company. The MOST critical planning consideration is:
AThe location of the registered office
BThe colour of the audit binder
CWhether the firm has sufficient resources, expertise and ability to perform the audit appropriately
DThe firm's logo design
Answer & Solution
Correct answer: D. The firm's logo design
1. SA 220 / SA 210 require the firm to assess capacity and competence before acceptance.
2. Mismatched firm-to-engagement size is the central planning risk.
3. Cosmetic factors are not planning considerations.
_Source: ICAI BoS CA Final Paper 3, Ch 2 "Audit Planning Strategy and Execution"_
Related questions
Audit planning is BEST viewed as:When changes in audit strategy require re-evaluation of engagement risk, the partner shoulA first-year audit's opening balances are governed by:For an audit involving multiple components in different geographies, the engagement partneWhen the engagement team finds that a planned procedure cannot be performed (e.g. inventorUnder SA 300, the auditor's plan for tests of controls in the current year is influenced bThe engagement partner should determine that the engagement team has the appropriate compeA material weakness in the entity's controls over journal entries is identified at plannin