AUDIT PLANNING

Presented By :-
Pritam Darakh
B.Com T.Y
AUDIT PLANNING

The first step in audit process is

planning. Every audit should be
carefully planned to ensure
highest technical standards
make best use of audit
personnel and achieve utmost
efficiency.
Audit plan helps to

a. Ensure that appropriate attention is

devoted to important areas of audit.
b. See that potential problems are
promptly identified.
c. Ensure that work is completed on
time.
d. Coordinate the work done by other
auditors and experts.
e. Utilize the assistants properly.
Factors to be considered
while planning the audit
a. Complexity of the audit.
b. Environment in which the
entity operates.
c. Previous experience with the
client.
d. Knowledge of client's
business.
Knowledge of the client's
business
a. The client's annual report to its shareholders;

b. Minutes of meetings of shareholders, Board of Directors etc;

c. Internal financial management reports;

d. Previous year's audit working papers;

e. Discussion with client;

f. The client's policy and procedures manual;

g. Consideration to the state of economy and its affect on client's

business; and h. visit of the client's premises and plant facilities.
 Development of an overall
plan
a. Terms of audit engagement and statutory responsibilities.
b. Nature and timing of reports or other communication.
c. Relevant legal and statutory requirements.
d. Accounting policies of client and changes therein.
e. Effect of new accounting or auditing pronouncements on the
audit.
f. Identification of critical audit areas.
g. Conditions requiring special attention.
h. Degree of reliance as regards accounting system and internal
control.
i. Possible rotation of emphasis on specific audit areas.
j. Nature, timing and extent of audit evidence to be obtained.
k. Work of internal auditors and reliance to be placed on them.
l. Consideration to branch auditor's report.
m. Allocation of work between joint auditors and the procedures
for its control and review.
n. Establishing and coordinating the staff requirements.
Developing the audit program