Auditing Audit planning is the first step in the audit process. It includes understanding the client’s...

Auditing

Audit planning is the first step in the audit process. It includes understanding the client’s business and industry and performing preliminary analytical procedures to assess client business risk and other kinds of risks that could affect the audit process. Describe the importance of audit planning and how it affects the remaining of the audit process. ( In a paragraph form if possible ,would be great to answer it ).

Expert Solution

Audit Planning:

An audit is divided in three parts: 1) Planning. 2) Performing. 3) Reporting.

Planning of audit is one of the most critical step for developing audit strategy. Audit planning includes understanding the client’s business and industry and performing preliminary analytical procedures to assess client business risk and other kinds of risks that could affect the audit process. While planning an audit an auditor generally considers the effectiveness of internal control observes during previous year in case of continuing audit. In case of new audit assignment the auditor develops understanding of internal controls. Planning of audit would help auditor in determining nature timing and extent of audit procedures to be applied. The planning of auditor also reduces the scope of miscommunication between auditor and his team and also between auditor and his client.
When an audit plan is developed it helps auditor in conducting the audit in smooth and efficient manner. It helps auditor to finish audit assignment within reasonable time and at reasonable cost. Further audit planning would help auditor in gathering better quality of evidence as the audit work would be pre - allocated.
In case of Joint audit, adult planning would help in assigning responsibility to each joint auditor, further any problem that arises during audit could be resolved promptly if audit is planned in a proper manner.

ekkarill92 answered 1 year ago

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