Audit Planning
Audit Plan
Not a discrete phase but rather a continuous and dynamic part of the audit which
usually occurs after acceptance of an engagement or at the end of the previous audit
Benefits of planning
Right amt attention to important issues
Problems areas found and resolved fast
Audit managed efficiently and effectively
Right members allocated
Effective work allocation
Experts and other auditors properly coordinated
Those responsible for audit planning usually hold senior roles with expertise and
experience in area
The Audit must be planned with professional scepticism paying attention to issues
which may cause material misstatement or events during audit which may require
change in plan, scope or objective
Discussion with client
General scope and approach focusing on significant risks, accounts and
accounting policies and changes proposed
Audit limitations
Admin issues
Co-operation with staff
Audit strategy memo is a high-level summary of the overall audit including significant
risks and accounts and an overview of nature, extent and timing of activities.
Audit Plan
Nature, extent and timing of RAPS and testing
Admin and control of audit resources
Programmes and procedures to be followed
Framework for planning
Step 1: Obtaining understanding of entity and environment
, Objective
Enables auditor to identify and assess risk of MMS on an overall level
Helps to plan audit, exercise judgment, identify significant accounts and
transactions
Respond to risks
Aspects to obtain understanding
External Factors
Industry
Regulatory
General economy and indicators
Internal Factors
Business operations
Investments
Financing
Fin Reporting
Objectives and strategies related to business risks
Industry changes
New accounting regs
New products
Etc.
These risks relate to either external or internal factors
Measurement and review of fin performance
Ratios and stats
KPIs
Trends
Use of forecasts, projections and budgets
Analyse documents and reports
Period to period performance
RAPS
Enquiries to those in charge of gov, transactional recording, management, fin
stats, experts
Analytical procedures to find unusual transactions
Observation and inspection of activities, documents, reports, WPs
Step: 2 Obtaining an understanding of the entity’s internal controls and acc info
Audit Plan
Not a discrete phase but rather a continuous and dynamic part of the audit which
usually occurs after acceptance of an engagement or at the end of the previous audit
Benefits of planning
Right amt attention to important issues
Problems areas found and resolved fast
Audit managed efficiently and effectively
Right members allocated
Effective work allocation
Experts and other auditors properly coordinated
Those responsible for audit planning usually hold senior roles with expertise and
experience in area
The Audit must be planned with professional scepticism paying attention to issues
which may cause material misstatement or events during audit which may require
change in plan, scope or objective
Discussion with client
General scope and approach focusing on significant risks, accounts and
accounting policies and changes proposed
Audit limitations
Admin issues
Co-operation with staff
Audit strategy memo is a high-level summary of the overall audit including significant
risks and accounts and an overview of nature, extent and timing of activities.
Audit Plan
Nature, extent and timing of RAPS and testing
Admin and control of audit resources
Programmes and procedures to be followed
Framework for planning
Step 1: Obtaining understanding of entity and environment
, Objective
Enables auditor to identify and assess risk of MMS on an overall level
Helps to plan audit, exercise judgment, identify significant accounts and
transactions
Respond to risks
Aspects to obtain understanding
External Factors
Industry
Regulatory
General economy and indicators
Internal Factors
Business operations
Investments
Financing
Fin Reporting
Objectives and strategies related to business risks
Industry changes
New accounting regs
New products
Etc.
These risks relate to either external or internal factors
Measurement and review of fin performance
Ratios and stats
KPIs
Trends
Use of forecasts, projections and budgets
Analyse documents and reports
Period to period performance
RAPS
Enquiries to those in charge of gov, transactional recording, management, fin
stats, experts
Analytical procedures to find unusual transactions
Observation and inspection of activities, documents, reports, WPs
Step: 2 Obtaining an understanding of the entity’s internal controls and acc info
