Audit Planning

The auditor should plan the audit so that the engagement will performed in an effective manner.

Definitions

Audit strategy:

The formulation of the general strategy for the audit, which sets the scope, timing and direction of the audit and guides the development of the audit plan.

Audit plan

An audit plan is more detailed than the strategy and sets out the nature, timing and extent of audit procedures (including risk assessment procedures) to be performed by engagement tem members in order to obtain sufficient appropriate audit evidence.

Audit plan shows how the overall audit strategy will be implemented.

Audits are planned to:

• · Ensure appropriate attention is devoted to important areas of audit
• · Identify potential problems and resolve them on a timely basis
• · Ensure that the audit is properly organized and managed
• · Assign work to engagement team members properly
• · Facilitate direction and supervision of engagement team members
• · Facilitate review of work

A structured approach to planning will include

Step 1

Ensuring that the ethical requirements continue to be met

Step 2

Ensuring the terms of engagement are understood

Step 3

Establishing the overall audit strategy

Step 4

Developing an audit plan including risk assessment procedures, audit tests and any other procedures necessary to comply with