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We can call Audit planning as a complete process to critically checking the differences bewteen processes designed and actual actions made. It cannot be a single activity because auditors need to look for possible risks, their degrees and the influcence on the organizations.
That is why they need to device a complete plan opn how they would proceed, make assessment, categorize and draft reports.
Audit planning is an essential process that helps auditors to identify and assess the risks associated with the audited entity, develop an audit strategy, and determine the scope and objectives of the audit.
Firstly, audit planning involves a comprehensive review and analysis of the client's financial and operational data, for true & fair view of financial statements
Secondly, audit planning involves the identification of potential risks and the development of an audit strategy to address those risks.
Thirdly, audit planning involves coordinating with various stakeholders, including the client's management team, other members of the audit team, and external experts as needed.
Lastly, audit planning is an ongoing process, as circumstances can change throughout the audit engagement that may require the audit team to modify their approach. For example, unexpected events such as fraud or significant changes in the client's business operations may require the audit team to re-evaluate their audit strategy.
Audit planning is considered as a series of activities because it involves a continuous process of assessing risks, developing procedures, identifying resources, and obtaining approval.
Breaking the planning process into a series of activities one can ensure that the audit is conducted efficiently and effectively, with a focus on achieving the objectives of the current audit and the long term management goals.
Audit planning is a critical stage in the audit process where the auditor establishes the overall scope, objectives, and timeline of the audit. This process involves a series of activities that are typically performed over an extended period and are rarely completed in a single event. The primary reasons why audit planning is considered as a series of activities are as follows:
Comprehensive coverage: Audit planning involves assessing the risk and identifying areas of the organization that require audit attention. This requires a thorough understanding of the organization's operations and an assessment of the risks associated with those operations. Such assessments are not something that can be done in a single event, as they require a considerable amount of time and effort.
Continual evaluation and adjustment: Audit planning is not a static process. Once the audit plan has been developed, it needs to be continuously evaluated and adjusted to ensure that it remains relevant and effective. As new information becomes available or changes occur within the organization or its operating environment, the audit plan needs to be updated to reflect these developments.
Collaboration and communication: Audit planning requires collaboration and communication between the auditor and the audit team, as well as with key stakeholders in the organization. This collaboration and communication are ongoing processes that occur throughout the audit planning phase and are not something that can be completed in a single event.
Complexity of audit engagements: Audit engagements are typically complex and require significant planning to ensure that all relevant areas are covered. This complexity means that audit planning is often broken down into smaller, more manageable activities that can be completed over time, rather than attempting to plan the entire audit in a single event.
Overall, audit planning is considered as a series of activities rather than a single event because it requires ongoing assessment, evaluation, collaboration, and communication to ensure that the audit is effective and achieves its objectives.
The planning process allows the auditor to identify the most important areas and potential problems of the examination, assess the level of risk, and schedule the collection of evidence necessary to examine the various components of the audited entity.
Audit planning is considered a series of activities rather than a single event because it involves various stages such as risk assessment, scoping, setting objectives, identifying resources, and developing a timeline. The planning process ensures that auditors are prepared to conduct the audit effectively, and any changes in circumstances can be accommodated.
Audit strategy sets the scope, timing and direction of the audit, and guides the development.
Because Audit is very helpful for the company in which we see what is the total cost and how to reduce this without change the efficiency
ISA 300 states that audit planning activities should: establish the overall audit strategy for the engagement; develop an audit plan. Audit strategy. The audit ...
Audit planning should be an ongoing process. With technological advancement time to time audit planning facilitates in mitigating any incident by doing a gap analysis.
