SAS No. 47 Planning an Audit of Financial Statements     

Status

Issued by Auditing Standards Committee in Taiwan on 1 October, 2009

Summary

This Statement deals with the auditor’s responsibility to plan an audit of financial statements so that the audit will be performed in an effective manner.

Planning an audit involves establishing the overall audit strategy for the engagement and developing an audit plan.

An overall audit strategy sets the scope, timing and direction of the audit, and guides the development of the audit plan.

An audit plan includes a description of the nature, timing and extent of planned risk assessment procedures; the nature, timing and extent of planned further audit procedures at the assertion level; and other planned audit procedures that are required to be carried out so that the engagement complies with Statements of Auditing Standards.

Planning is a continual and iterative process that often begins shortly after the completion of the previous audit and continues until the completion of the current audit engagement.

The nature and extent of planning activities will vary according to the size and complexity of the entity, the key engagement team members’ previous experience with the entity, and changes in circumstances that occur during the audit engagement.

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.

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

  • Performing procedures required by SAS No. 44 Quality Control for Audit of Historical Financial Information regarding the continuance of the client relationship and the specific audit engagement;
  • Evaluating compliance with relevant ethical requirements, including independence, in accordance with SAS No. 44 Quality Control for Audit of Historical Financial Information; and
  • Establishing an understanding of the terms of the engagement.
The audit documentation shall include the overall audit strategy, the audit plan, and any significant changes made during the audit engagement to the overall audit strategy or the audit plan, and the reasons for such changes.

For initial audit engagements, the auditor shall undertake the following activities prior to starting an audit:

  • Performing procedures required by SAS No. 44 Quality Control for Audit of Historical Financial Information regarding the acceptance of the client relationship and the specific audit engagement; and
  • Communicating with the predecessor auditor, where there has been a change of auditors, in compliance with SAS No. 17 Communication between Successor and Predecessor Auditors.

Effective date

This Statement is effective from 1 January, 2010.

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