7: Planning Flashcards
What are the three stages to the audit process?
- Plan audit
- Understand the systems and controls
- Confirm the operation of the system
Why is planning an audit important?
5 things
- Devote time to important areas
- Identify and resolve problems in a timely basis
- Organise so engagements is performed in a effective and efficient manner
- Facilitates supervision of team
- Assisting in coordination of experts and internal audit
What are the 10 sections of an audit strategy document?
- Understanding entities environment
- Understanding accounting systems and internal controls
- Risk
- Analytical procedures
- Materiality
- Consequent nature, and extent of audit procedures
- Timings
- Deadlines and budgets
- Team
- Co-ordination, supervision and review of audit work
What is involved in
- Understanding entities environment
Provided detail on
- Industry activities / strategies
- Financial framework
- Use of service organisations
What is involved in
- Understanding accounting systems and internal contro
- Accounting policies
- Previous assessment of internal controls
What is involved in
- Risk
- Assessment of areas of risk
- Potential areas of significant risk
What is involved in
- Analytical procedures
Identify trends to see if expectations have been met
What is involved in…
- Materiality
Calculate the materiality
What is involved in
- Consequent nature, and extent of audit procedures
- Details of the focus on specific areas.
- Detail on the extent of use of audit software and reliance on internal audit.
- Approach to the audit
What is involved in
- Timings
When are the activities going to take place?
- Interim
- Final
- Signing of report
What is involved in
- Deadlines and budgets
Stating when the work has to be done by, and what resources are available to do this.
What is involved in
- Team
Ensuring appropriate staff are available for the audit
What is involved in
- Co-ordination, supervision and review of audit work
Details the extent of
- involvement of experts,
- client locations and;
- staffing requirements for the audit.
What is an interim audit?
It is voluntary, conducted in between two final audits (during an accounting period)
What is a final audit?
Done after the end of the accounting period, and focuses on confirming amounts in the financial statements