AUDIT PLANNING

Planning an audit involves establishing the overall audit strategy for the engagement and developing an audit plan.
A strategy can be defined as a pattern of activities that seeks to achieve the objectives of an assignment and adapt its scope, resources and operations to environmental changes in the long term.
The objective of the auditor is to plan the audit so that it will be performed in an effective manner.
The auditor shall undertake the following activities at the beginning of the audit engagement, before planning the audit:
• Review the terms of the audit engagement.
• Consider the integrity of the client.
• Consider the competence of the engagement team.
• Consider whether the firm and engagement team comply with relevant ethical requirements.
• Consider communicating with the predecessor auditor, where there has been a change of auditors, in compliance with relevant ethical requirements.
• Other significant incidences that occurred during the previous engagements.
The process of establishing the overall audit strategy assists the auditor to determine, subject to the completion of the auditor’s risk assessment procedures.
The audit plan could include the following:

 Introduction,
 Detailed understanding of the entity and its business model,
 Understanding the components of the system of internal control,
 Identification and assessment of the risk of material misstatement,
 Materiality,
 Audit team and other resources,
 Audit fee,
 Audit program.