Audit planning is a vital area of the
audit
An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing ...
, primarily conducted at the beginning of audit process, to ensure that appropriate attention is devoted to important areas, potential problems are promptly identified, work is completed expeditiously and work is properly coordinated. "Audit planning" means developing a general strategy and a detailed approach for the expected nature, timing and extent of the audit. The auditor plans to perform the audit in an efficient and timely manner.
Definition
An audit plan is the specific guideline to be followed when conducting an audit. it helps the auditor obtain sufficient appropriate evidence for the circumstances, helps keep audit costs at a reasonable level, and helps avoid misunderstandings with the client. Audit planning includes establishing the overall strategy for the audit engagement, with a particular focus on planned risk assessment procedures and responses to the identified risks of material misstatement.
It addresses the specifics of what, where, who, when and how:
* What are the audit objectives?
* Where will the audit be done? (i.e. scope)
* When will the audit occur? (how long?)
* Who are the auditors?
* How will the audit be done?
Benefits of audit plan
* It helps the auditor obtain sufficient appropriate evidence for the circumstances.
* It helps to keep audit costs at a reasonable level.
* It helps to avoid misunderstandings with the client.
* It helps to ensure that potential problems are promptly identified.
* It helps to know the scope of audit program by an auditor.
* It helps to carry out the audit work smoothly and in a well defined manner.
Process of audit planning
It includes following procedures
* Knowledge of client's business, which includes financing, legal framework, government norms, investments, accounting policies, business risk and financial risk
* Development of audit strategies or overall plan (who, when and how)
* Preparation of audit programmer
References
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See also
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Internal audit
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to ...
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Risk-based auditing
Risk-based auditing is a style of auditing which focuses upon the analysis and management of risk.
In the UK, the 1999 Turnbull Report on corporate governance required directors to provide a statement to shareholders of the significant risks to ...
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Financial audit
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Project audit
A project is any undertaking, carried out individually or collaboratively and possibly involving research or design, that is carefully planned to achieve a particular goal.
An alternative view sees a project managerially as a sequence of even ...
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Technical audit
Technical audit (TA) is an audit performed by an auditor, engineer or subject-matter expert evaluates deficiencies or areas of improvement in a process, system or proposal. Technical audit covers the technical aspects of the project implemented in ...
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Cost auditing
A cost audit
An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereo ...
Auditing terms