Planned Scope and Timing of an Engagement – CPA Exam Definitions

Planned Scope and Timing of an Engagement CPA Exam

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Planned Scope and Timing of an Engagement

The “planned scope and timing of an engagement” in an audit refers to the auditor’s predetermined approach to the extent of work (scope) and the scheduling (timing) of audit procedures that will be performed to gather sufficient appropriate audit evidence, enabling the auditor to form an opinion on the financial statements.

  • Scope: The scope of an audit engagement depends on factors such as the size and complexity of the client’s operations, the nature of the client’s industry, the assessed risks of material misstatement, and the applicable financial reporting framework. The scope determines which areas and accounts of the financial statements require more attention and resources, as well as the nature, extent, and timing of the audit procedures to be performed.
  • Timing: The timing of an audit engagement refers to when the audit procedures will be conducted. It includes considerations such as the client’s reporting deadlines, the availability of the client’s personnel and records, and the need to perform certain audit procedures at specific points in time (e.g., inventory observations or tests of controls). The auditor schedules the audit procedures to ensure that the work is completed efficiently and effectively, and that the audit opinion can be issued in a timely manner.

The planned scope and timing of an engagement are typically documented in an audit plan or audit strategy, which is prepared by the auditor during the planning phase of the audit. This plan serves as a roadmap for the audit team, outlining the objectives, risks, procedures, and timetable for the engagement. It is important to note that the planned scope and timing may need to be revised during the course of the audit, as new information comes to light or circumstances change.

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