PSA 300 Summary

PSA 300 Planning an audit of F/S

1. The auditor should plan the audit so that the engagement will be performed in an eectie manner.

!in !inol ole es s esta establ blis ishi hing ng the the oer oeral alll audi auditt stra strate teg" g" for for the the enga engage geme ment nt and and deeloping an audit plan# in order to reduce audit ris$ to an acceptabl" low leel. !inoles !inoles the engagemen engagementt partner partner and other other $e" $e" members members of the engagement engagement team to bene%t from their e&perience and insight and to enhance the eectieness and e'cienc" of the planning process. !ensure that appropriate attention is deoted to important areas of the audit# that potential problems are identi%ed and resoled on a timel" basis and that the audit engagement is properl" organi(ed and managed !ass !assis ists ts in the the prop proper er assi assign gnme ment nt of wor$ wor$ to enga engage geme ment nt team team memb member ers# s# facilita facilitates tes the directi direction on and superis superision ion of engagemen engagementt team members and the reiew of their wor$# and assists# where applicable# in coordination of wor$ done b" auditors of components and e&perts.

). Preliminar" *ngagement Actiities

!Perform procedures regarding the continuance of the client relationship and the speci%c audit engagement !*aluate compliance with ethical re+uirements# including independence !*stablish an understanding understanding of the terms of the engagement !ensure that the auditor plans an audit engagement for which, -The auditor maintains the necessar" independence and abilit" to perform the engagement. -The -Therre are are no issu issues es with with mana manage geme ment nt inte integr grit it" " that that ma" ma" aec aectt the the auditors willingness willingness to continue the engagement.

-There is no misunderstanding with the client as to the terms of the engagement.

3. The auditor should establish the oerall audit strateg" for the audit.

-etermining the characteristics of the engagement that de%ne its scope# such -Ascertaining the reporting obecties of the engagement to plan the timing of the audit and the nature of the communications re+uired as the %nancial reporting framewor$ used -onsidering the important factors that will determine the focus of theengagement teams eorts

2. The auditor should deelop an audit plan for the audit in order to reduce audit ris$ to an acceptabl" low leel.

!includes, -the nature# timing and e&tent of planned ris$ assessment procedures su'cient to assess the ris$s of material misstatement -nature# timing and e&tent of planned further audit procedures at the assertion leel for each material class of transactions# account balance# and disclosure

. The oerall audit strateg" and the audit plan should be updated and changed as necessar" during the course of the audit.

!As a result of une&pected eents# changes in conditions# or the audit eidence obtained from the results of audit procedures# the auditor ma" need to modif" the oerall audit strateg" and audit plan# and thereb" the resulting planned nature# timing and e&tent of further audit procedures.

4. The auditor should plan the nature# timing and e&tent of direction and superision of engagement team members and reiew of their wor$.

!As the assessed ris$ of material misstatement increases# for the area of audit ris$# the auditor ordinaril" increases the e&tent and timeliness of direction and superision of engagement team members and performs a more detailed reiew of  their wor$.

5. The auditor should document the oerall audit strateg" and the audit plan# including an" signi%cant changes made during the audit engagement.

!records the $e" decisions considered necessar" to properl" plan the audit and to communicate signi%cant matters to the engagement team. !su'cient to demonstrate the planned nature# timing and e&tent of ris$ assessment procedures# and further audit procedures !an" signi%cant changes to the originall" planned oerall audit strateg" and to the detailed audit plan includes the reasons for the signi%cant changes and the auditors response to the eents# conditions# or results of audit procedures that resulted in such changes. !Although discussions with those charge with goernance often occur# the oerall audit strateg" and the audit plan remain the auditors responsibilit".

6. Additional onsiderations in 7nitial Audit *ngagements --The auditor should perform the following actiities prior to starting an initial audit, 8a9 Perform procedures regarding the acceptance of the client relationship and the speci%c audit engagement 8b9 ommunicate with the preious auditor# where there has been a change of auditors# in compliance with releant ethical re+uirements.