The Audit Planning

Question 1

The Audit planning

Answer 1

Here’s a simplified breakdown of the audit planning process:

Engagement Budgeting
1. Risk Assessment: Identify areas with a higher risk of material misstatement.
2. Time Allocation: Allocate sufficient time to address high-risk areas.

Audit Plan
1. Risk Assessment Procedures: Outline procedures to assess the risk of misstatement.
2. Further Audit Procedures: Detail planned procedures for each material audit area.

Audit Procedures
1. Obtain Sufficient Evidence: Gather sufficient, appropriate audit evidence.
2. Reduce Audit Risk: Reduce audit risk to an acceptably low level.

Audit Programmes
1. Instructions for Audit Team: Provide instructions on audit procedures for each area.
2. Sets of Instructions: Organize instructions into sets of audit programmes.

Documentation
1. Overall Audit Strategy: Document the overall audit strategy.
2. Audit Plan: Document the audit plan.
3. Changes to Strategy or Plan: Document any significant changes, along with reasons.

This documentation provides evidence that the audit was planned and performed in accordance with professional standards.