Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Audit planning

7,974 views

Published on

Published in: Education
  • Be the first to comment

Audit planning

  1. 1. Planning ISA 300
  2. 2. Planning SUMMARYPreliminary Audit Audit Review Activities Strategy Plan
  3. 3. Planning Wider aspects When How Much Preliminaries Depends on:On Completing Last Audit(control deficiencies / 1) Size and complexity of Evaluating compliance withunadjusted errors) client relevant ethical requirements, including independence.As Audit Progresses - 2) Previous experience with thesignificant event changing the client, and Establishing an understandingplan of the terms of the 3) Any changes in engagement. circumstance that may occur during the audit.
  4. 4. Planning Wider aspects When How Much Preliminaries Depends on:On Completing Last Audit(control deficiencies / 1) Size and complexity of Evaluating compliance withunadjusted errors) client relevant ethical requirements, including independence.As Audit Progresses - 2) Previous experience with thesignificant event changing the client, and Establishing an understandingplan of the terms of the 3) Any changes in engagement. circumstance that may occur during the audit.
  5. 5. Planning Wider aspects When How Much Preliminaries Depends on:On Completing Last Audit(control deficiencies / 1) Size and complexity of Evaluating compliance withunadjusted errors) client relevant ethical requirements, including independence.As Audit Progresses - 2) Previous experience with thesignificant event changing the client, and Establishing an understandingplan of the terms of the 3) Any changes in engagement. circumstance that may occur during the audit.
  6. 6. Planning Wider aspects When How Much Preliminaries Depends on:On Completing Last Audit(control deficiencies / 1) Size and complexity of Evaluating compliance withunadjusted errors) client relevant ethical requirements, including independence.As Audit Progresses - 2) Previous experience with thesignificant event changing the client, and Establishing an understandingplan of the terms of the 3) Any changes in engagement. circumstance that may occur during the audit.
  7. 7. Audit Strategy
  8. 8. Audit StrategyLogisticsManaging Resources
  9. 9. Audit Strategy Logistics Managing ResourcesPlanning Results Of the audit
  10. 10. Audit Strategy Logistics Scope Managing Resources of the auditPlanning Results Of the audit
  11. 11. Audit Strategy Logistics Scope Managing Resources of the auditPlanning Results Reporting Of the audit Objectives
  12. 12. Audit Strategy Identify the ScopeEg. a group audit engagement will both have wider scope than an SMEauditConsider the use of the work of internal auditors, external serviceorganisations, IT on audit procedures, FR framework, the entity’sbusiness, any business segments, and the availability of client personnel Reporting ObjectivesAny CG requirements?The nature of other communications such as withcomponent auditors, and communications to management and to thosecharged with governance.ISA 300 states that audit planning activities should:• establish the overall audit strategy for the engagement
  13. 13. Audit Strategy LogisticsSuch as quality control, how resources are managed, directed andsupervised, when team briefing and debriefing meetings are expectedto be held, how engagement partner and manager reviews areexpected to take place (for example, on-site or off-site), and whether tocomplete engagement quality control reviews. Planning ResultsSet initial materiality, any fraud risks, significant events that haveoccurred since the last audit, and the results of previousaudits evaluating internal controls (any deficiencies and action taken)Any other relevant services, eg reviews of business plans or cash flowforecasts.ISA 300 states that audit planning activities should:• establish the overall audit strategy for the engagement
  14. 14. Audit Strategy Nature, timing & resourcesThe use of specialists, highly experienced auditors for a potentially highrisk audit engagement.If time pressured, then more resources neededISA 300 states that audit planning activities should:• establish the overall audit strategy for the engagement
  15. 15. PlanningA detailed programme giving instructions as to how eacharea of the audit will be conducted
  16. 16. Planning A detailed programme giving instructions as to how each area of the audit will be conducted 1Nature, timing and extent of planned risk assessment procedures
  17. 17. Planning A detailed programme giving instructions as to how each area of the audit will be conducted 1 2Nature, timing and extent of planned Nature, timing and extent of planned risk assessment procedures further audit procedures at the assertion level
  18. 18. Planning A detailed programme giving instructions as to how each area of the audit will be conducted 1 2 3Nature, timing and extent of planned Nature, timing and extent of planned Other planned audit procedures risk assessment procedures further audit procedures at the so that the engagement assertion level complies with ISAs.
  19. 19. Audit Plan Changes Updated as Necessary Information comes that is different toFor example, as a result of unexpected the planned info.events, the auditor may need tomodify the planned nature, timing and For example, an event creating doubtextent of further audit procedures, over going concern.based on the revised consideration ofassessed risks. Or, amend initial risk assessment / performance materiality, for all, or part, of the audit, after performing planning procedures Audit strategy is not always prepared and completed before the audit plan, in practice it is typical for the two to be developed together
  20. 20. Documentation
  21. 21. DocumentationKey Decisions 1 So docs are vital
  22. 22. DocumentationKey Decisions 1 Changes Document So docs are vital auditor 2 response
  23. 23. DocumentationKey Decisions 1 Changes Document So docs are vital auditor 2 response Standardised Audit Programmes 3
  24. 24. Documentation Key Decisions 1 Changes Document So docs are vital auditor 2 responseTailored Standardised Types Audit Programmes 4 3
  25. 25. Documentation Key Decisions 1Clear Record Changes all is needed Document So docs are vital auditor 5 2 response Tailored Standardised Types Audit Programmes 4 3
  26. 26. Direction & Supervision
  27. 27. Direction & Supervision Plan it! The amount of detail included in the audit plan depends on factors such as:How supervision and reviewshould be conducted during the 1) The size and complexity of the entityaudit 2) The assessed risk of material misstatement 3) The capabilities of the audit team members.Inadequate supervision andreview can lead to errors, eg.selecting inappropriate items forsampling
  28. 28. For Initial Engagements Client CommunicateEngagement with the Procedures predecessor More auditor Planning Needed Planning is a dynamic process that may evolve during the audit, and should always respond to changes in the circumstances of the audited entity

×