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CHAPTER 7 - Coggle Diagram
CHAPTER 7
Objective of planning
Appropriate attention is devoted to important areas
Potential problems are identified & resolved on a timely basis
Audit work is organized & completed quickly
Facilitate direction, supervision & review of audit work
To co-ordinate work done by experts & other auditors
Appropriate audit staff is to be selected & proper work assigned to them
Factors of planning
Size of entity
Complexity of audit
Auditor's experience
Commercial environment
Methods of processing transaction
Reporting requirements
Audit plan
Risk assessment procedures
Audit procedure at assertion level
Other procedures to comply with ISA
Example
Timetable of planned audit work
Allocation of work to audit team members
Audit procedures for each major account area
Materiality for fs as a whole & performance materiality
Audit strategy
What to consider
Scope
Timing
Direction
Guides the development of more detailed audit plan
Examples
Industry-specific financial reporting requirements
No. of locations to be visited
Audit client's timetable for reporting to its shareholders/ members
Communication between audit team & client
Audit
Interim
Visit
During the period of review
Purpose
Carry out procedures that would be diff. to perform at year end
Work
Risk assessment
Document
Test IC
Procedures
Inherent risk assessment
Gain an understanding of entity
Record system of IC
Evaluate design of IC
Test of IC
Substantive test of transaction/books
Identify issues that may impact work during final audit
Final
Visit
After year end
Purpose
Audit of fs
Issue report
Take into account
Conclusion reached at both (all) visit
Work
Agree fs to accounting records & examining adjustments made during process of preparing fs
Procedures
Verification in SOPL & SOFP
Obtain 3rd party confirmation
Analytical procedures of figures in fs
Subsequents events review
Consideration of going concern status
Conclusion during interim audit still valid
Obtain written representation