Reference no: EM133002565

Explain the importance of planning the audit process, including comprehending the meaning of materiality and appreciate how materiality levels are determined.

Your audit firm is the long-time auditor of Stone Pty Ltd, a large proprietary company with two subsidiaries: Agate Pty Ltd, which runs a quarry in country New South Wales, and Garden Beds Pty Ltd, a landscaping business in Melbourne. You are undertaking the audit of Stone for the year ended 30 June 2018 and have had an initial conversation with the chief financial officer (CFO), Raymond Ferguson, at Stones' head office. Raymond has given you the sad news that Roberta, the company's assistant accountant and bookkeeper for the past 25 years, fell ill suddenly in October 2017, shortly after the installation of the company's new computer system. She has since died and has not yet been replaced. Various members of the company's staff have been assisting with the bookkeeping to the best of their abilities when they have had time. The senior audit partner in your firm is especially distressed, given that she has been conducting the audit for about 20 years and Roberta was also her daughter's netball coach and a friend of the family. Required: Outline considerations that would influence the scope of the overall audit strategy (Refer to Appendix 1 of ASA 300 for relevant consideration. Answers must be specific to this case study).