Question

what is audit planning

Answer 1

Answer :

AUDIT PLANNING

Planning an audit involves establishing the overall audit strategy for the engagement and developing an audit plan. The objective of auditor is to plan the audit so that it will be performed in an effective manner. Once the overall plan can be developed to address various matters identified in the overall audit strategy, considering the need to achieve the audit objectives through efficient use of auditor’s resources. Auditor should consider various matters in developing the overall plan like:-

• Terms of Engagement,
• Nature and Timing of reports,
• Applicable legal and statutory requirements,
• Accounting policies adopted by the client,
• Identification of significant audit areas,
• Setting Materiality levels etc. and more.

Auditor needs to obtain level of knowledge of client’s business that will enable them to identify events, transactions and practices that, in their judgment, may have a significant effect on financial information. Audit plan is more detailed

than overall audit strategy that includes the nature, timing and extent of audit procedures to be performed by engagement team members. Engagement partner and other key members of engagement team shall be involved in planning the audit, including planning and participating in the discussion among engagement team members so as to enhance effectiveness and efficency of planning process.