How to Do Audit strategy-Planning an audit

Planning an audit

Audit strategy
How to Do Audit strategy-Planning an audit

Preparing an audit plan is that the first stage within the conduct of an audit engagement. The plan sets.

Out responds to three main queries (the “3Ws”)

1. Who will perform the audit work? (Staffing)

2. When will the work be done? (Timing)

3. What work is to be done? (The scope of the audit)

Risk assessment and the audit plan

To prepare an appropriate audit plan, the auditor must have in-depth knowledge and

understanding of:

· The entity to be audited, and

· The atmosphere in which the article operates.

· The auditor needs this information and consideration in order to assess the danger attached to the Audit.

. Risk assessment may be a key feature of the audit planning process and therefore the assessment of

· Risk in the audit will affect.

· The quantity of audit work present in general, and

· The regions on which the auditor focal point his attention.

The planning process is important to all or any audits, both internal and external. It is equally important

To other assurance engagements like a “review” assignment.

Planning Activities

Audit strategy-Planning an audit

The auditor shall organization an in general audit master plan that arranges the range, timing, and track of the audit, which straight the event of the audit arrangement.

· In ascertain the general audit ways, the auditor shall recognize the quality of the Engagement that defines its scope.

· Ascertain the coverage objectives of the appointment to arrange the occasion of the audit and therefore the

· Nature of the communications required.

· Ascertain the issue that, within the auditor’s specialized judgment are important in straight.

· The engagement team’s efforts.

· Think about the results of preliminary engagement activities and, where applicable whether.

· Knowledge raise on other engagements implement by the engagement partner for the Entity is related.

· Ascertain the character, timing, and extent of resources necessary to perform the Engagement.

Contents of the general audit strategy and therefore the audit plan

The overall audit strategy

As began above, the general audit strategy sets the scope, timing, and direction of the audit

And conduct the expansion of the more thorough audit arrangement. The organization of the overall

audit strategy involves the following:

Audit and Assurance

· Formative the individuality of the engagement that outlines its scope such as:

· The financial coverage structure used (for example, international financial coverage standards).

Any industry-specific reporting requirements

· The situation of the components of the entity (for example, there could be overseas branches).

· The nature of the control relationships between a parent and its components and the coverage to which mechanisms are audited by other auditors.

· The environment of the business sections to be audited, counting the need for specialized information.

· The reporting currency to be used, including needing for currency translation for the

financial information audited.

· the necessity for a statutory audit of standalone financial statements additionally to an

audit for consolidation purposes.

· Whether the entity has an indoor audit function and, if so, whether, during which areas

And to what extent, the work of the function is often used, or internal auditors are often used to offer direct help, for the principle of the audit.

· The entity’s use of service organizations and the way the auditor may obtain evidence concerning the planning or operation of controls performed by them.

· The predictable use of audit facts obtained in preceding audits, for illustration.

Audit confirmation is linked to risk appraisal procedures and tests of management.

· The result of information skill on the audit events, counting the accessibility of data and therefore the predictable use of computer-assisted audit techniques.

· The organization of the predictable coverage and occasion of the audit work with any reviews of temporary financial information.

And therefore the effect on the audit of the knowledge obtained during such reviews.

· The accessibility of client employees and data.

· Ascertaining the reporting objectives of the engagement, like reporting deadlines

and the nature of communications required.

· Allowing for necessary facts will determine the focus of the audit team’s hard work.

Such As:

· materiality thresholds

· high-risk areas of the audit

· the audit approach (for example, whether the auditor is getting to believe the

· entity’s internal controls)

· any recent developments in reference to the entity, the industry, legal environment or

· financial reporting requirements.

· Progression used by management to recognize and prepare confession required.

· Applicable financial reporting framework

· The above will then allow the auditor to make a decision on the character, extent, and timing of resources

· needed to perform the engagement. In particular, the auditor should consider:

· where experienced members of staff could also be needed (for example, in high risk areas)

· the amount of staff to be allocated to specific areas (for example, extra staff could also be wanted for number present at the year-end record count).

· when the resources are needed (for example, are more staff needed at the ultimate audit than at the interim audit).

How to Do Audit strategy-Planning an audit
How to Do Audit strategy-Planning an audit

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