AUDIT PLANNING- a continuous or iterative process, not discrete

OBJECTIVE: To determine scope of audit procedure to be performed

Factors that affect planning

 Size and complexity of entity

 Changes in circumstances that occur during audit
 Key management team members’ previous experience

Benefits of planning

 Devotes appropriate attention to important areas of audit

 Identify and resolve potential problems on a timely basis
 Properly organize and manage audit engagement
 Assist in selection of engagement team members
 Facilitating direction and supervision of team members
 Assist in coordination of work done by auditors of components and experts

ACTIVITIES

Obtain an Establishing Development of Preparation of

understanding materiality and overall audit preliminary
(Risk assessing risk strategy and programs
Assessment) detailed audit plan

CONSIDERATIONS: OTHER CONSIDERATIONS:

 Identify related parties  Discussion with

 Perform analytical management
procedures  Arrangement for
 Determining need for an company’s assistance
auditor’s expert  Establishing audit team
 Considering the work of  Scheduling of audit work
internal auditors

 Obtain an understanding (Risk Assessment)

REQUIRED UNDERSTANDING
 Relevant industry, regulatory and other factors including applicable standards and policy.
 Nature of the entity (business operation) including its internal controls.
 Entity’s selection and application of accounting and auditing policies.
 Objectives, strategies and related business risks
 Measurement and review of entity’s financial performance
RISK ASSESSMENT PROCEDURE- procedures performed to obtain understanding of the entity and
environment.