Introduction of Standard on Auditing (SA) 300
1. Auditing and Assurance Standard (AAS) 1, “Basic Principles Governing an Audit”, states
“The auditor should plan his work to enable him to conduct an effective audit in an efficient and
timely manner. Plans should be based on a knowledge of the client’s business. Plans should be made to cover, among other things:
(a) acquiring knowledge of the client’s accounting systems, policies and internal control procedures;
(b) establishing the expected degree of reliance to be placed on internal control;
(c) determining and programming the nature, timing, and extent of the audit procedures to be
(d) coordinating the work to be performed. Plans should be further developed and revised as necessary during the course of the audit.” The purpose of this Standard is to amplify the basic principle outlined above.
2. This Standard applies to the planning process of the audit of both financial statements and other
financial information. The Statement is framed in the context of recurring audits. In a first audit, the
auditor may need to extend his planning process beyond the matters discussed herein.
3. Planning should be continuous throughout the engagement and involves:
♦ developing an overall plan for the expected scope and conduct of the audit; and
♦ developing an audit programme showing the nature, timing and extent of audit procedures.
Changes in conditions or unexpected results of audit procedures may cause revisions of the overall
plan and of the audit programme. The reasons for significant changes may be documented.
4. Adequate audit planning helps to:
♦ ensure that appropriate attention is devoted to important areas of the audit;
♦ ensure that potential problems are promptly identified;
♦ ensure that the work is completed expeditiously;
♦ utilise the assistants properly; and
♦ co-ordinate the work done by other auditors and experts.
5. In planning his audit, the auditor will consider factors such as complexity of the audit, the
environment in which the entity operates, his previous experience with the client and knowledge of the client’s business.
6. The auditor may wish to discuss elements of his overall plan and certain audit procedures with
the client to improve the efficiency of the audit and to coordinate audit procedures with work of the
client’s personnel. The overall audit plan and the audit programme, however, remain the auditor’s