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Unit 2.2, Engagement Planning (Individual) - Coggle Diagram
Unit 2.2
Engagement Planning
(Individual)
Establish engagem Objectives
and Finalize the Scope
Perf Std 2200 "Engagement Planning"
IA must develop and doc a
plan
for each engagem,
including obj, scope, timing, resource allocation
plan must consider org's strategies, obj, and risk
relevant to the engagem
Perf Std 2210 "Engagement Objectives"
2210.A1 - IA must conduct preliminary assessm of the risks
relevant to the activity under review.
Engagem obj must reflect the results of assessm
2210.A2 - IA must consider the probabiity of sign errors,
fraud, non-compliance, and other exposures when
developing the engagem obj
2210.A3 - adequate criteria are needed to evaluate
gov, risk mgt and ctrl
2210.C1 - obj must address gov, risk mgt and ctrl processes to the extent agreed upon with the client
2210.C2 - obj must consistent with the org's values,
strategies and obj
IIA definition
"Broad statements developed by IA that
define intended engagem accomplishment"
-> help define an audit deliverables
(measurable, verifiable work pdt)
engagement obj
(internal audit)
vs
e.g.identify and evaluate ctrl in
place to increase pdt recognition in China
operational obj
(mgt - daily operation)
e.g. increase pdt recognition in China mkt
Perf Std 2220 "Engagement Scope"
2220.A1 - must consider of relevant systems, records,
personnel, and physical properties
2220.A2 - if sign consulting opportunity arise
-> a specific written understanding -
obj, scope, respective respon/ other expectations
-> communicate the result of consulting engagem
2220.C1 - ensure the scope is suff to address
the agreed-upon obj; if reservation - discuss with client
2220.C2 - address ctrl consistent with the engagem obj and be alert to sign ctrl issue
est the boundaries of IA
-> IA will do by specifying which activities
will be review, excluded in the engagem
Engagement criteria
-> consistent with audit engagem obj
-> ultimately yield useful info to client
e.g. regulations, guidance, policies and
procedures, industry best practice,
client mgt roles and responsibilities
Determine engagem
Procedures and prepare
engagem work program
Perf Std 2240 "Engagement work program"
2240.A1 must include procedures for identifying, analyzing, evaluating and doc info during the engagement
must approved prior to its implementation and adjustments
2240.C1 may vary in form and content depending upon the nature of engagem
IIA define:
a doc that lists the procedures to be followed
during an engagem, designed to ach the engagem plan
Key consideration for developing work program:
risk register/ risk matrix
scope of engagem
how engagem obj will be achieved
availability of necessary resources
app
sample size
for test and methodologies to be used
judgem and conclusions made during planning phase
work program include:
how audit is performed
who is going to perform
steps to be follow
instruction of proper executive of audit
Why need work program
ensure audit work is properly planned and doc
-> provide an outline of work to be performed and facilitating
the understanding of audit unit
-> provide a record for mgt review
-> provide assurance that all risks have rec adequate consideration
-> furnishes evidence that the work is adequately plannes
-> assist in ctrlling work and assign responsibilities
->give order and coherence to the audit
Engagement procedures
detailed steps, instructions, guidelines for auditors
for the collections and accumulation of a particular audit evidence
e.g. ensure procedures are designed to test that ctrl achieve key attributes (accurate, reliable, timely, consistent, reasonable)
Audit evidence
IA must gather evidence to
support audit opinion,conclusions and
recommendations in final audit report
Source
People - mgt in audit area, others, external
Physical - statement of observers
Documentation - memo, letters, a/c record,
activity logs
Operations - activities, systems, work processes, functions
Measurements
Software and electronic database - software,
application, data storage
Requirement
Quality
-> relevance (logical, sensible, related to audit)
-> reliability (come from a credible source)
Quantity
-> sufficiency (enough to persuade - validity of findings)
Audit Test
-> means to obtain the data/ evidence
Inquiry (conjunction with other more reliable methods)
observation (useful when there is no doc of the operation of ctrl)
examination/ inspection of evidence (review written doc & records - to check manual ctrl - e.g. contract, entrance log)
computations and analysis (gather evidence of errors, variances e.g. CAAT)
re-performance (above methods combined fail to provide suff assurance/ prove that automated ctrl is operating effectively)
confirmations (direct, written response from 3rd parties e.g +ve/ -ve)
tracing (transaction forward from trigger event to result event - completeness) and
vouching (result backward to originating event - existence)
analytical procedures (relationship among fin/ non-fin data)
planning phase - determine nature, extent, timing of audit procedures
if unusual transactions/ event/ ratio -> further investigation
(e.g. common size f/s, ratio, trend, future-oriented info, external/ internal benchmark)
Determine the level of Staff and Resources
needed for engagem
Perf Std 2230 "Engagement resource allocation"
IA must determine app and suff resources to achieve engagem obj
based on an evaluation of the nature and complexity of each
engagem, time constraints and available resources
Factor to consider:
understand the nature and complexity of engagement through discussion with key stakeholders
assign app personnel - based on availability, knowledge, skills, experience
( compensate: additional training, closer supervision, guest auditor, co-source)
aware no. of hours budget
doc - conformance with the std 2230:
--> approved engagement work program
--> IA activity's planning notes
--> timesheet - monitor budget hours against actual hours
--> post-audit client survey - on quality of IA resources and timeliness of audit report
Construct an audit staff Schedule
for Effective Use of Time
important tools for managing
the audit resource's efficiently
block of time:
Initial planning,
creation of audit program,
fieldwork
internal audit manager review,
report writing
client review and discussion
Gantt chart (proj schedule technique)
divide each proj into sequential activities with est start and completion time
help plan tasks to be completed
provide a basis for scheduling when task will be executed
graphically display a proj's key activities and duration asso
show task milestones and relationships btw
predecessor/ successor tasks