Audit Strategy

Introduction

• the resources to deploy for specific audit areas (e.g. experience level, external experts);
• the amount of resources to allocate (e.g. number of team members);
• when the resources are to be deployed; and
• how the resources are managed, directed and supervised, including the timings of meetings, debriefs and reviews.

Considerations in establishing the overall strategy

Characteristics of the engagement

• What is the financial reporting framework for the financial statements?
• Are there industry specific requirements? e.g. listed companies and charities;
• The number and locations of premises, branches, subsidiaries etc;
• The nature of the client and the need for specialised knowledge;
• The reporting currency;
• The effect of IT on audit procedures, including availability of data.

Reporting objectives, timing of the audit, and nature of communication

• The timetable for interim and final reporting;
• The organisation of meetings with management;
• The expected types and timings of auditor's reports/communications;
• The expected nature and timing of communication amongst team members; and
• Whether there are any expected communications with third parties.

Significant factors and preliminary engagement activities

• Materiality;
• Results of risk assessment;
• Professional scepticism;
• Results of previous audits;
• Evidence of management's commitment to internal controls;
• Volume of transactions;
• Significant business developments/changes;
• Significant industry developments; and
• Significant financial reporting changes.

Nature, timing and extent of resources

• The selection of and assignment of work to the engagement team; and
• Budgets.

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