Overall Audit Startegy And Plan

Question 1

Overall strategy

Answer 1

Here’s a simplified version:

Overall Audit Strategy and Audit Plan

The overall audit strategy sets the scope, timing, and direction of the audit. It involves:

1. Determining Engagement Characteristics: Identifying the financial reporting framework, industry-specific requirements, entity components, business segments, and reporting currency.
2. Ascertaining Reporting Objectives: Establishing deadlines, key dates, and communication plans with management and those charged with governance.
3. Considering Important Factors: Identifying materiality thresholds, high-risk areas, audit approach, and resource requirements.

Audit Plan

The audit plan outlines the nature, extent, and timing of resources needed to perform the engagement. It involves:

1. Selecting the Engagement Team: Assigning team members to areas with higher risk of material misstatement.
2. Assigning Audit Work: Allocating tasks to team members based on their experience and expertise.