The Audit Planning Process

Planning Objectives

"The objective of the auditor is to plan the audit so that it will be performed in an effective manner." (ISA 300 Planning and Audit of Financial Statements).

• Devotes appropriate attention to important areas of the audit;
• Identifies and resolves potential problems on a timely basis;
• Organises and manages the audit so that it is performed in an effective and efficient manner;
• Selects team members with appropriate capabilities and competencies;
• Directs and supervises the team and reviews their work; and
• Effectively coordinates the work of others, such as experts and internal audit.

The purpose of all this is to ensure that the risk of performing a poor quality audit (and ultimately giving an inappropriate audit opinion) is reduced to an acceptable level.

The planning process

Planning consists of a number of elements. However, they could be summarised as:

Preliminary engagement activities:

• evaluating compliance with ethical requirements; and
• establishing the terms of the engagement.

Planning activities:

• developing the audit strategy; and
• developing an audit plan.

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Tags:	audit strategy;audit plan;auditing