You are an audit manager in SOGS & Co, an audit firm which operates as part of an international network of firms. This morning you received a note from a partner regarding a potential new audit client:

 

'I have been approached by the audit committee of the UPSA Group, which operates in the telecommunications sector. Our firm has been invited to tender for the audit of the individual and group financial statements for the year ending 31 December 2022, and I would like your help in preparing the tender document. This would be a major new client for our firm's telecoms audit department.

The UPSA Group comprises a parent company and four subsidiaries, one of which is located overseas. The audit committee is looking for a cost effective audit, and hopes that the strength of the UPSA Group's governance and internal control mean that the audit can be conducted quickly, with a proposed deadline of 31 May 2023. The UPSA Group has expanded rapidly in the last few years and significant finance was raised in March 2022 through a stock exchange listing.'

Required:

Identify and explain the specific matters to be included in the tender document for the audit of the UPSA Group. (8 marks)

(b) Effective planning of an audit work will focus the auditor's attention on key areas of the audit and ensure that sufficient resources are allocated to the engagement. Planning should result in an audit that is well directed and supervised and ultimately good planning will reduce audit risk.

ISA 300, Planning an audit of Financial Statements states that Audit Planning activities should establish the overall audit strategy for the engagement and develop an audit plan.

Required;

As an audit manager for SOGS & Co, imagine that you were successful in tendering for the UPSA Group, develop a simple;

2. Audit strategy, (6 marks)
4. Audit Plan, (6 marks)