Session 3.

1: Prepare the Overall Audit Strategy Exercise

Exercise 3.1
Contents of Overall Audit Strategy

Objective:

To familiarize the participants with the activities and expected output per Audit Phase.

Time required:
Individual reading and
answer: 20 minutes
Plenary Discussion 15
Total Time 35 minutes

Instructions:

1. Match the Audit Activities with the expected output per Audit Phase.
2. Group the the audit activities and expected output per the following Audit Phase
 Planning
 Execution
 Reporting
 Quality Control Review

Activities Expected Output

1. Conduct initial risk assessment based on available data and a. Materiality template
additional documents requested from management b. Approved Engagement
2. Establish materiality threshold Planning Memorandum
3. Approved Engagement Planning Memorandum supported with supported with Audit Program
Audit Program by account/assertions/special considerations by account/assertions/special
4. Review financial statements and corresponding Notes to FS to considerations
ensure compliance to presentation and disclosure requirements c. WP on Financial Analysis
by ISSAIs d. Summary Report on the
Preliminary Assessment of
5. Conduct exit conference
Risks
6. Secure Management Representation Letter which is dated near
e. Summary of other audit
the date of the audit report
activities
7. Update risk assessment based on the additional information, data
f. Auditee Feedback Sheet
and reports
g. Final AAR and signed IAR
8. Prepare the recommendation tracking sheet indicating the control h. Director’s Evaluation Form
number and deadline for implementation
i. AOM, NS, ND, NC, AM
9. Finalize AAR and sign the IAR
j. Working Papers
10. Identify other audit activities not covered in the risk assessment
k. Draft Report
11. Issue AOM, ND, NS, NC, Audit Memorandum, as the need arises l. Financial Management
12. Prepare Summary of Audit Observations and Recommendations Performance Rating
13. Draft the annual audit report including section on the results of m. Results of Risk Assessment at
internal control review the Assertion Level
14. Accomplish compliance completion checklist supported by audit n. Draft AAR
working papers
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Session 3.1: Prepare the Overall Audit Strategy Exercise

Activities Expected Output

15. Transmit the audit report to the management o. Summary of notes for review
16. Wrap-up, organization and archiving of working papers p. Summary of Audit
17. Send the Auditee Feedback Sheet to Agency for accomplishment Observations and
18. Submit draft report to the supervisor for review Recommendations
19. Submit draft report to the Director for review
q. Agency Action Plan
r. Recommendation Tracking
20. Prepare Audit Engagement Planning Memorandum including
Sheet
audit program by account/by assertion/ by special considerations
s. Specific Audit Instructions
21. Issue Specific Audit Instructions to the audit team for the
t. Updated OAS
execution of the audit plan
u. Minutes of exit conference
22. Perform final financial statements variance and tie-in analysis v. Management Representation
23. Prepare summary of proposed audit adjustments and evaluate Letter
effects in the audit opinion w. Duly received Transmittal
24. Accomplish the Director’s Evaluation Form Letter
25. Rate Management Performance x. Compliance completion
26. Approve Audit Engagement Planning Memorandum checklist
27. Follow-up of the Agency Action Plan y. Summary of proposed audit
28. Updating overall audit strategy (OAS) adjustments
z. Working Papers (WP) by
account

Seminar on Financial Audit Manual Page 2