Council

AuditingStandardsandPractices

PhilippineStandardonAuditing300(Redrafted)PLANNI

NGANAUDITOFFINANCIALSTATEMENTS
PHILIPPINESTANDARDONAUDITING300(REDRAFTED)PLANNIN
GANAUDITOFFINANCIALSTATEMENTS
(EffectiveforauditsoffinancialstatementsforperiodsbeginningonorafterDecember15,200
9)

CONTENTS
Paragraph

Introduction
ScopeofthisPSA......................................................................................
.........................
EffectiveDate.........................................................................................
...........................
Objective..............................................................................................
...........................

1
2
3

Requirements
InvolvementofKeyEngagementTeamMembers.......................................
.....................
PreliminaryEngagementActivities..........................................................
........................
PlanningActivities...................................................................................
........................

4
5
610

Documentation......................................................................................
............................
AdditionalConsiderationsinInitialAuditEngagements..............................
...................

11
12

ApplicationandOtherExplanatoryMaterial

TheRoleandTimingofPlanning...............................................................................
....A1-

A4InvolvementofKeyEngagementTeamMembers.................................................
.........A5PreliminaryEngagementActivities...........................................................
.....................A6-

A8PlanningActivities............................................................................................
.............A9-

A16Documentation..............................................................................................
.................A17-

A20AdditionalConsiderationsinInitialAuditEngagements.....................................
.........A21
Appendix:ConsiderationsinEstablishingtheOverallAuditStrategy

Acknowledgment
PhilippineStandardonAuditing(PSA)300(Redrafted),PlanninganAuditofFin
ancialStatementsshouldbereadinthecontextofthePrefacetothePhilippin
eStandardsonQualityControl,Auditing,Review,OtherAssuranceandRelate
dServices,whichsetsouttheauthorityofPSAs.

IntroductionSc
opeofthisPSA
1.
ThisPhilippineStandardonAuditing(PSA)dealswiththeauditorsrespo
nsibilitytoplananauditoffinancialstatements.ThisPSAisframedinthec
ontextofrecurringaudits.Additionalconsiderationsininitialauditenga
gementsareseparatelyidentified.(Ref:Para.A1A4)
EffectiveDate
2.
ThisPSAiseffectiveforauditsoffinancialstatementsforperiodsbegin
ningonorafterDecember15,2009.

Objective
3.
Theobjectiveoftheauditoristoplantheauditsothatitwillbeperformed
inaneffectivemanner.

RequirementsInvolvementofKeyEngagementTeamMembers
4.
Theengagementpartnerandotherkeymembersoftheengagementte
amshallbeinvolvedinplanningtheaudit,includingplanningandpartici
patinginthediscussionamongengagementteammembers.
(Ref:Para.A5)

PreliminaryEngagementActivities
5.
Theauditorshallundertakethefollowingactivitiesatthebeginningofth
ecurrentauditengagement:
1

2
3

(a)
PerformingproceduresrequiredbyPSA220,QualityControlforAuditso
fHistoricalFinancialInformationregardingthecontinuanceoftheclien
trelationshipandthespecificauditengagement;
(b)
Evaluatingcompliancewithethicalrequirements,includingindepende
nce,asrequiredbyPSA220;and
(c)
Establishinganunderstandingofthetermsoftheengagement,asrequir
edbyPSA210,TermsofAuditEngagements.(Ref:Para.A6A8)

PlanningActivities
1

Theauditorshallestablishanoverallauditstrategythatsetsthescope,ti
minganddirectionoftheaudit,andthatguidesthedevelopmentofthea
uditplan.
1 7. Inestablishingtheoverallauditstrategy,theauditorshall:
2 (a)
Identifythecharacteristicsoftheengagementthatdefineitsscope;
3 (b)
Ascertainthereportingobjectivesoftheengagementtoplanthetimi
ngoftheauditandthenatureofthecommunicationsrequired;
4 (c)
Considerthefactorsthat,intheauditorsprofessionaljudgment,are
significantindirectingtheengagementteamsefforts;

6
7

2
3

(d)
Considertheresultsofpreliminaryengagementactivitiesand,wher
eapplicable,whetherknowledgegainedonotherengagementsperf
ormedbytheengagementpartnerfortheentityisrelevant;and
(e)
Ascertainthenature,timingandextentofresourcesnecessarytoper
formtheengagement.(Ref:Para.A9A12)
8.

Theauditorshalldevelopanauditplanthatshallincludeadescription
of:
8 (a)
Thenature,timingandextentofplannedriskassessmentprocedure
s,asdeterminedunderPSA315,IdentifyingandAssessingtheRisks
ofMaterialMisstatementThroughUnderstandingtheEntityandItsE
nvironment.
9 (b)
Thenature,timingandextentofplannedfurtherauditproceduresatt
heassertionlevel,asdeterminedunderPSA330,TheAuditorsResp
onsestoAssessedRisks.
10 (c)
Otherplannedauditproceduresthatarerequiredtobecarriedoutsot
hattheengagementcomplieswithPSAs.(Ref:Para.A13)
Theauditorshallupdateandchangetheoverallauditstrategyandtheau
ditplanasnecessaryduringthecourseoftheaudit.(Ref:Para.A14)
Theauditorshallplanthenature,timingandextentofdirectionandsuper
visionofengagementteammembersandthereviewoftheirwork.
(Ref:Para.A15A16)

1
2
3
4

11.
Theauditorshalldocument:
(a) Theoverallauditstrategy;
(b) Theauditplan;and
(c)
Anysignificantchangesmadeduringtheauditengagementtotheov
erall

Documentation
auditstrategyortheauditplan,andthereasonsforsuchchanges.
(Ref:Para.A17A20)

AdditionalConsiderationsinInitialAuditEngagements
12.
Theauditorshallundertakethefollowingactivitiespriortostarting
aninitialaudit:
1

(a)
PerformingproceduresrequiredbyPSA220regardingtheacceptanceo

ftheclientrelationshipandthespecificauditengagement;and
(b)
Communicatingwiththepredecessorauditor,wheretherehasbeenach
angeofauditors,incompliancewithrelevantethicalrequirements.
(Ref:Para.A21)

***

ApplicationandOtherExplanatoryMaterial
TheRoleandTimingofPlanning(Ref:Para.1)
A1.Planninganauditinvolvesestablishingtheoverallauditstrategyfortheen
gagementanddevelopinganauditplan.Adequateplanningbenefitsth
eauditoffinancialstatementsinseveralways,includingthefollowing:
Helpingtheauditortodevoteappropriateattentiontoimportantareaso
ftheaudit.
Helpingtheauditoridentifyandresolvepotentialproblemsonatimelyb
asis.
Helpingtheauditorproperlyorganizeandmanagetheauditengageme
ntsothatitisperformedinaneffectiveandefficientmanner.
Assistingintheselectionofengagementteammemberswithappropria
televelsofcapabilitiesandcompetencetorespondtoanticipatedrisks,
andtheproperassignmentofworktothem.
Facilitatingthedirectionandsupervisionofengagementteammember
sandthereviewoftheirwork.
Assisting,whereapplicable,incoordinationofworkdonebyauditorsofc
omponentsandexperts.
A2.Thenatureandextentofplanningactivitieswillvaryaccordingtothesizean
dcomplexityoftheentity,thekeyengagementteammemberspreviou
sexperiencewiththeentity,andchangesincircumstancesthatoccurdu
ringtheauditengagement.
A3.Planningisnotadiscretephaseofanaudit,butratheracontinualanditerati
veprocessthatoftenbeginsshortlyafter(orinconnectionwith)thecom
pletionofthepreviousauditandcontinuesuntilthecompletionofthecu
rrentauditengagement.Planning,however,includesconsiderationof
thetimingofcertainactivitiesandauditproceduresthatneedtobecom
pletedpriortotheperformanceoffurtherauditprocedures.Forexampl
e,planningincludestheneedtoconsider,priortotheauditorsidentific
ationandassessmentoftherisksofmaterialmisstatement,suchmatte
rsas:
Theanalyticalprocedurestobeappliedasriskassessmentprocedures.
Obtainingageneralunderstandingofthelegalandregulatoryframewor
kapplicabletotheentityandhowtheentityiscomplyingwiththatframe

work.
Thedeterminationofmateriality.
Theinvolvementofexperts.
Theperformanceofotherriskassessmentprocedures.
A4.Theauditormaydecidetodiscusselementsofplanningwiththeentitysma
nagementtofacilitatetheconductandmanagementoftheauditengag
ement(forexample,tocoordinatesomeoftheplannedauditprocedures
withtheworkoftheentity'spersonnel).Althoughthesediscussionsofte
noccur,theoverallauditstrategyandtheauditplanremaintheauditor's
responsibility.Whendiscussingmattersincludedintheoverallauditstr
ategyorauditplan,careisrequiredinordernottocompromisetheeffecti
venessoftheaudit.Forexample,discussingthenatureandtimingofdet
ailedauditprocedureswithmanagementmaycompromisetheeffectiv
enessoftheauditbymakingtheauditprocedurestoopredictable.
InvolvementofKeyEngagementTeamMembers(Ref:Para.4)
A5.Theinvolvementoftheengagementpartnerandotherkeymembersoft
heengagementteaminplanningtheauditdrawsontheirexperience
andinsight,
1

therebyenhancingtheeffectivenessandefficiencyoftheplanningprocess.
PreliminaryEngagementActivities(Ref:Para.5)
A6.Performingthepreliminaryengagementactivitiesspecifiedinparagraph
5atthebeginningofthecurrentauditengagementassiststheauditorini
dentifyingandevaluatingeventsorcircumstancesthatmayadversely
affecttheauditorsabilitytoplanandperformtheauditengagement.
A7.Performingthesepreliminaryengagementactivitiesenablestheauditort
oplananauditengagementforwhich,forexample:
Theauditormaintainsthenecessaryindependenceandabilitytoperfor
mtheengagement.
Therearenoissueswithmanagementintegritythatmayaffecttheaudit
orswillingnesstocontinuetheengagement.
Thereisnomisunderstandingwiththeclientastothetermsoftheengage
ment.
A8.Theauditorsconsiderationofclientcontinuanceandethicalrequirement
s,includingindependence,occursthroughouttheauditengagementa
sconditionsandchangesincircumstancesoccur.Performinginitialpro
ceduresonbothclientcontinuanceandevaluationofethicalrequireme
nts(includingindependence)atthebeginningofthecurrentauditenga
gementmeansthattheyarecompletedpriortotheperformanceofothe
rsignificantactivitiesforthecurrentauditengagement.Forcontinuing
auditengagements,suchinitialproceduresoftenoccurshortlyafter(or
inconnectionwith)thecompletionofthepreviousaudit.

PSA315establishesrequirementsandprovidesguidanceontheengagementteam'sdiscus
sionofthesusceptibilityoftheentitytomaterialmisstatementsofthefinancialstatements.P
SA240,TheAuditor'sResponsibilitiesRelatingtoFraudinanAuditofFinancialStatements
providesguidanceontheemphasisgivenduringthisdiscussiontothesusceptibilityoftheen
tity'sfinancialstatementstomaterialmisstatementduetofraud.

PlanningActivities
TheOverallAuditStrategy(Ref:Para.67)
A9.Theprocessofestablishingtheoverallauditstrategyassiststheauditorto
determine,subjecttothecompletionoftheauditorsriskassessmentp
rocedures,suchmattersas:
Theresourcestodeployforspecificauditareas,suchastheuseofapprop
riatelyexperiencedteammembersforhighriskareasortheinvolvemen
tofexpertsoncomplexmatters.
Theamountofresourcestoallocatetospecificauditareas,suchasthenu
mberofteammembersassignedtoobservetheinventorycountatmate
riallocations,theextentofreviewofotherauditorsworkinthecaseofgro
upaudits,ortheauditbudgetinhourstoallocatetohighriskareas;
Whentheseresourcesaretobedeployed,suchaswhetherataninterima
uditstageoratkeycutoffdates;and
Howsuchresourcesaremanaged,directedandsupervised,suchaswhe
nteambriefinganddebriefingmeetingsareexpectedtobeheld,howen
gagementpartnerandmanagerreviewsareexpectedtotakeplace(fore
xample,onsiteoroffsite),andwhethertocompleteengagementqualitycontrolreviews.
A10.TheAppendixlistsexamplesofconsiderationsinestablishingtheover
allauditstrategy.
A11.Oncetheoverallauditstrategyhasbeenestablished,anauditplancanbe
developedtoaddressthevariousmattersidentifiedintheoverallaudits
trategy,takingintoaccounttheneedtoachievetheauditobjectivesthr
oughtheefficientuseoftheauditorsresources.Theestablishmentofth
eoverallauditstrategyandthedetailedauditplanarenotnecessarilydi
screteorsequentialprocesses,butarecloselyinterrelatedsincechangesinonemayresultinconsequentialchangestothe
other.
ConsiderationsSpecifictoSmallerEntities
A12.Inauditsofsmallentities,theentireauditmaybeconductedbyaverysmall
auditteam.Manyauditsofsmallentitiesinvolvetheengagementpartne
r(whomaybeasolepractitioner)workingwithoneengagementteamm
ember(orwithoutanyengagementteammembers).Withasmallertea
m,coordinationof,andcommunicationbetween,teammembersareeasier.E
stablishingtheoverallauditstrategyfortheauditofasmallentityneedn

otbeacomplexortimeconsumingexercise;itvariesaccordingtothesizeoftheentity,thecomp
lexityoftheaudit,andthesizeoftheengagementteam.Forexample,abr
iefmemorandumpreparedatthecompletionofthepreviousaudit,base
donareviewoftheworkingpapersandhighlightingissuesidentifiedinth
eauditjustcompleted,updatedinthecurrentperiodbasedondiscussio
nswiththeownermanager,canserveasthedocumentedauditstrategyforthecurrentau
ditengagementifitcoversthemattersnotedinparagraph7.
TheAuditPlan(Ref:Para.8)
A13.Theauditplanismoredetailedthantheoverallauditstrategyinthatitinclu
desthenature,timingandextentofauditprocedurestobeperformedby
engagementteammembers.Planningfortheseauditprocedurestakes
placeoverthecourseoftheauditastheauditplanfortheengagementde
velops.Forexample,planningoftheauditor'sriskassessmentprocedur
esoccursearlyintheauditprocess.However,planningthenature,timin
gandextentofspecificfurtherauditproceduresdependsontheoutcom
eofthoseriskassessmentprocedures.Inaddition,theauditormaybegin
theexecutionoffurtherauditproceduresforsomeclassesoftransaction
s,accountbalancesanddisclosuresbeforeplanningallremainingfurth
erauditprocedures.
ChangestoPlanningDecisionsDuringtheCourseoftheAudit(Ref:Para.9)
A14.Asaresultofunexpectedevents,changesinconditions,ortheauditevide
nceobtainedfromtheresultsofauditprocedures,theauditormayneedt
omodifytheoverallauditstrategyandauditplanandtherebytheresulti
ngplannednature,timingandextentoffurtherauditprocedures,based
ontherevisedconsiderationofassessedrisks.Thismaybethecasewhe
ninformationcomestotheauditorsattentionthatdifferssignificantlyfr
omtheinformationavailablewhentheauditorplannedtheauditproced
ures.Forexample,auditevidenceobtainedthroughtheperformanceof
substantiveproceduresmaycontradicttheauditevidenceobtainedthr
oughtestsofcontrols.
Direction, SupervisionandReview(Ref:Para.10)
A15.Thenature,timingandextentofthedirectionandsupervisionofenga
gementteammembersandreviewoftheirworkvarydependingon
manyfactors,including:
1
2
3

Thesizeandcomplexityoftheentity.
Theareaoftheaudit.
Theassessedrisksofmaterialmisstatement(forexample,anincreasei
ntheassessedriskofmaterialmisstatementforagivenareaoftheaudito
rdinarilyrequiresacorrespondingincreaseintheextentandtimeliness

ofdirectionandsupervisionofengagementteammembers,andamore
detailedreviewoftheirwork).
Thecapabilitiesandcompetenceoftheindividualteammembersperfor
mingtheauditwork.PSA220containsfurtherguidanceonthedirection,
supervisionandreviewofauditwork.

ConsiderationsSpecifictoSmallerEntities
A16.Whenanauditiscarriedoutentirelybytheengagementpartner,questio
nsofdirectionandsupervisionofengagementteammembersandrevi
ewoftheirworkdonotarise.Insuchcases,theengagementpartner,hav
ingpersonallyconductedallaspectsofthework,willbeawareofallmate
rialissues.Forminganobjectiveviewontheappropriatenessofthejudg
mentsmadeinthecourseoftheauditcanpresentpracticalproblemswh
enthesameindividualalsoperformstheentireaudit.Whenparticularly
complexorunusualissuesareinvolved,andtheauditisperformedbyas
olepractitioner,itmaybedesirabletoconsultwithothersuitablyexperiencedauditorsortheauditorsprofessionalbody.
Documentation(Ref:Para.11)
A17.Thedocumentationoftheoverallauditstrategyisarecordofthekeydec
isionsconsiderednecessarytoproperlyplantheauditandtocommun
icatesignificantmatterstotheengagementteam.Forexample,thea
uditormaysummarizetheoverallauditstrategyintheformofamemo
randumthatcontainskeydecisionsregardingtheoverallscope,timi
ngandconductoftheaudit.
A18.Thedocumentationoftheauditplanisarecordoftheplannednature,timi
ngandextentofriskassessmentproceduresandfurtherauditprocedu
resattheassertionlevelinresponsetotheassessedrisks.Italsoserves
asarecordoftheproperplanningoftheauditproceduresthatcanberev
iewedandapprovedpriortotheirperformance.Theauditormayusest
andardauditprogramsorauditcompletionchecklists,tailoredasneed
edtoreflecttheparticularengagementcircumstances.
A19.Arecordofthesignificantchangestotheoverallauditstrategyandtheaud
itplan,andresultingchangestotheplannednature,timingandextentof
auditprocedures,explainswhythesignificantchangesweremade,and
theoverallstrategyandauditplanfinallyadoptedfortheaudit.Italsorefl
ectstheappropriateresponsetothesignificantchangesoccurringdurin
gtheaudit.
ConsiderationsSpecifictoSmallerEntities
A20.AsdiscussedinparagraphA12,asuitable,briefmemorandummayserv
easthedocumentedstrategyfortheauditofasmallerentity.Fortheaud
itplan,standardauditprogramsorchecklists(seeparagraphA18)dra

wnupontheassumptionoffewrelevantcontrolactivities,asislikelytob
ethecaseinasmallerentity,maybeusedprovidedthattheyaretailore
dtothecircumstancesoftheengagement,includingtheauditorsriska
ssessments.
AdditionalConsiderationsinInitialAuditEngagements(Ref:Para.12)
A21.Thepurposeandobjectiveofplanningtheauditarethesamewhetherthea
uditisaninitialorrecurringengagement.However,foraninitialaudit,th
eauditormayneedtoexpandtheplanningactivitiesbecausetheauditor
doesnotordinarilyhavethepreviousexperiencewiththeentitythatisco
nsideredwhenplanningrecurringengagements.Forinitialaudits,addit
ionalmatterstheauditormayconsiderinestablishingtheoverallauditst
rategyandauditplanincludethefollowing:
Unlessprohibitedbylaworregulation,arrangementstobemadewithth
epredecessorauditor,forexample,toreviewthepredecessorauditors
workingpapers.
Anymajorissues(includingtheapplicationofaccountingprinciplesorof
auditingandreportingstandards)discussedwithmanagementinconn
ectionwiththeinitialselectionasauditor,thecommunicationofthesem
atterstothosechargedwithgovernanceandhowthesemattersaffectth
eoverallauditstrategyandauditplan.
Theauditproceduresnecessarytoobtainsufficientappropriateauditev
idenceregardingopeningbalances(seePSA510,InitialEngagements
OpeningBalances).
Otherproceduresrequiredbythefirmssystemofqualitycontrolforiniti
alauditengagements(forexample,thefirmssystemofqualitycontrol
mayrequiretheinvolvementofanotherpartnerorseniorindividualtore
viewtheoverallauditstrategypriortocommencingsignificantauditpro
ceduresortoreviewreportspriortotheirissuance).

Acknowledgment
ThisPSAisbasedonInternationalStandardonAuditing300(Redrafted),Pla
nninganAuditofFinancialStatements,issuedbytheInternationalAuditing
andAssuranceStandardsBoard.
TherearenosignificantdifferencesbetweenthisPSA300(Redrafted)andI
SA300(Redrafted).

Appendi
x
(Ref:Para.67andA9A12)

ConsiderationsinEstablishingtheOverallAuditStrategy
Thisappendixprovidesexamplesofmatterstheauditormayconsiderinestabl
ishingtheoverallauditstrategy.Manyofthesematterswillalsoinfluencetheau

ditorsdetailedauditplan.Theexamplesprovidedcoverabroadrangeofmatte
rsapplicabletomanyengagements.Whilesomeofthemattersreferredtobelo
wmayberequiredbyotherPSAs,notallmattersarerelevanttoeveryauditenga
gementandthelistisnotnecessarilycomplete.
CharacteristicsoftheEngagement
1
2
3
4
5
6
7
8
9
10
11
12
13
14

Thefinancialreportingframeworkonwhichthefinancialinformationtob
eauditedhasbeenprepared,includinganyneedforreconciliationstoan
otherfinancialreportingframework.
Industryspecificreportingrequirementssuchasreportsmandatedbyindustryr
egulators.
Theexpectedauditcoverage,includingthenumberandlocationsofco
mponentstobeincluded.
Thenatureofthecontrolrelationshipsbetweenaparentanditscompon
entsthatdeterminehowthegroupistobeconsolidated.
Theextenttowhichcomponentsareauditedbyotherauditors.
Thenatureofthebusinesssegmentstobeaudited,includingtheneedfor
specializedknowledge.
Thereportingcurrencytobeused,includinganyneedforcurrencytransl
ationforthefinancialinformationaudited.
Theneedforastatutoryauditofstandalonefinancialstatementsinaddit
iontoanauditforconsolidationpurposes.
Theavailabilityoftheworkofinternalauditorsandtheextentoftheaudit
orspotentialrelianceonsuchwork.
Theentitysuseofserviceorganizationsandhowtheauditormayobtain
evidenceconcerningthedesignoroperationofcontrolsperformedbyth
em.
Theexpecteduseofauditevidenceobtainedinpreviousaudits,forexam
ple,auditevidencerelatedtoriskassessmentproceduresandtestsofco
ntrols.
Theeffectofinformationtechnologyontheauditprocedures,includingt
heavailabilityofdataandtheexpecteduseofcomputerassistedaudittechniques.
Thecoordinationoftheexpectedcoverageandtimingoftheauditworkw
ithanyreviewsofinterimfinancialinformationandtheeffectontheaudit
oftheinformationobtainedduringsuchreviews.
Theavailabilityofclientpersonnelanddata.

ReportingObjectives, TimingoftheAudit, andNatureofCommunications

1
2
3

Theentity'stimetableforreporting,suchasatinterimandfinalstages.
Theorganizationofmeetingswithmanagementandthosechargedwith
governancetodiscussthenature,timingandextentoftheauditwork.
Thediscussionwithmanagementandthosechargedwithgovernancer
egardingtheexpectedtypeandtimingofreportstobeissuedandotherc
ommunications,bothwrittenandoral,includingtheauditor'sreport,ma

4
5
6
7

nagementlettersandcommunicationstothosechargedwithgovernan
ce.
Thediscussionwithmanagementregardingtheexpectedcommunicati
onsonthestatusofauditworkthroughouttheengagement.
Communicationwithauditorsofcomponentsregardingtheexpectedty
pesandtimingofreportstobeissuedandothercommunicationsinconn
ectionwiththeauditofcomponents.
Theexpectednatureandtimingofcommunicationsamongengagemen
tteammembers,includingthenatureandtimingofteammeetingsandti
mingofthereviewofworkperformed.
Whetherthereareanyotherexpectedcommunicationswiththirdpartie
s,includinganystatutoryorcontractualreportingresponsibilitiesarisin
gfromtheaudit.

SignificantFactors, PreliminaryEngagementActivities, andKnowledg

eGainedonOtherEngagements
1. Thedeterminationofappropriatematerialitylevels,including:
1. Settingmaterialityforplanningpurposes.
2. Settingandcommunicatingmaterialityforauditorsofcomponen
ts.
3. Reconsideringmaterialityasauditproceduresareperformeddur
ingthecourseoftheaudit.
4. Preliminaryidentificationofmaterialcomponentsandaccountb
alances.
2 Preliminaryidentificationofareaswheretheremaybeahigherriskofma
terialmisstatement.
3 Theimpactoftheassessedriskofmaterialmisstatementattheoverallfi
nancialstatementlevelondirection,supervisionandreview.
4 Themannerinwhichtheauditoremphasizestoengagementteammem
berstheneedtomaintainaquestioningmindandtoexerciseprofession
alskepticismingatheringandevaluatingauditevidence.
5 Resultsofpreviousauditsthatinvolvedevaluatingtheoperatingeffecti
venessofinternalcontrol,includingthenatureofidentifiedweaknesses
andactiontakentoaddressthem.
6 Thediscussionofmattersthatmayaffecttheauditwithfirmpersonnelre
sponsibleforperformingotherservicestotheentity.
7 Evidenceofmanagement'scommitmenttothedesign,implementatio
nandmaintenanceofsoundinternalcontrol,includingevidenceofappr
opriatedocumentationofsuchinternalcontrol.
8 Volumeoftransactions,whichmaydeterminewhetheritismoreefficien
tfortheauditortorelyoninternalcontrol.
9 Importanceattachedtointernalcontrolthroughouttheentitytothesucc
essfuloperationofthebusiness.
10 Significantbusinessdevelopmentsaffectingtheentity,includingchan
gesininformationtechnologyandbusinessprocesses,changesinkeym
anagement,andacquisitions,mergersanddivestments.
11 Significantindustrydevelopmentssuchaschangesinindustryregulati

onsandnewreportingrequirements.
12 Significantchangesinthefinancialreportingframework,suchaschang
esinaccountingstandards.
13 Othersignificantrelevantdevelopments,suchaschangesinthelegalen
vironmentaffectingtheentity.
Nature, TimingandExtentofResources
Theselectionoftheengagementteam(including,wherenecessary,the
engagementqualitycontrolreviewer)andtheassignmentofauditwork
totheteammembers,includingtheassignmentofappropriatelyexperi
encedteammemberstoareaswheretheremaybehigherrisksofmateri
almisstatement.
Engagementbudgeting,includingconsideringtheappropriateamount
oftimetosetasideforareaswheretheremaybehigherrisksofmaterialm
isstatement.
ThisPSA300(Redrafted),PlanninganAuditofFinancialStatements,wasuna
nimouslyapprovedforadoptiononJanuary29,2007bythemembersoftheAud
itingandAssuranceStandardsCouncil.

BenjaminR.Punongbayan,Chairman

FelicidadA.Abad

ErwinVincentG.Alcala

DavidL.Balangue

AntonioP.Acyatan

FroilanG.Ampil

Ma.GraciaCasalsDiaz

AmorsoniaB.Escarda

ManuelO.Faustino

EliseoA.Fernandez

NestorioC.Roraldo

JoaquinP.Tolentino

JaimeE.Ysmael

EdithaO.Tuason