Audit Planning

Materials to cover

PART 1 

STEP 1 

1. Pre-plan: client’s acceptance - Pg 196 (Text book) Video F4|
Scope of audit work - Pg 197 (Text book) 1|2|Video Savvy|SP|

2. Engagement letter - Pg 197-199 (Text book) 

3. Changes in professional appointments

Fraud, error - Pg 135 (Text book)

4. Objectives FS audit - Pg 132 (Text book)

5. Management assertions - Pg 143 (Text book) 1| Video AM|Q|

STEP 2

Obtain client's information backgroud

1. Have better Understanding about client

2. Tour of client's facilities

3. Obtain knowledge & client's Industry & Business

4. Identify related party Information

5. Requirement of an Expert Work/outside specialists

Transaction-related audit objectives - Pg 144 (Text book) 1| video AU|

Balance-related audit objectives - Pg 146 (Text book) 1| video AU|

1. Knowledge of client’s business and industry - Pg 202 (Text book)
1. Industry and external environment - Pg 203 (Text book)
2. Business operations and processes - Pg 204 (Text book)

Client business risk - Pg 207 (Text book) 1| video HS|

STEP 3

Obtain client's LEGAL information

PART 2 

STEP 4

Preliminary analytical procedures - Pg 208 (Text book)

• Purpose
• Analyse Significant Ratios & Trends

STEP 5

Set Materiality and acceptable audit risk - Pg 236 (Text book) 1|video TAT2|AM|

• Definition and concept of materiality - Pg 236-237 (Text book)
• Types of materiality - Pg 238 (Text book)

1. Quantitative
2. Qualitative

Assessment of Risk 1| Video GM!|

Definition

1. Audit risk - Pg 244 (Text book) 1| Video Zuha|AM1|AM2|AM3|AM4|
2. Audit risk model - Pg 244 (Text book)
• Inherent risk - Pg 246-247 (Text book)
• Control risk - Pg 246-247 (Text book)
• Detection risk - Pg 246-247 (Text book)

      3. Can you identify Significant Risks for an audit client? video AM|

      4. How to Minimise audit risk?

      5. Relationship between Materility and Audit Risk

      6. Relationship between Audit Risk and Evidence

      7. Relationship between Audit Risk and Sampling

Sampling - Pg 450 (Text book) Video YB|

      1. Criteria - representative samples

      2. Reasonable assurance

      3. Type of audit sampling

STEP 6

Internal Control System

1. Definition
2. Objectives
3. Causes to have ICS
4. Effects of not having ICS
5. 5 Components of internal controls
6. Characteristics of good ICS
7. Inherent limitations of ICS
8. Importance of ICS to Management and Auditor
9. Documentation of ICS
10. Size vs Effectiveness of ICS
11. Letter of weaknesses to management - Pg 294 (Text book) 1| Video Asia|

Internal control - Pg 274 (Text book) 1| Video JubJub|

1. Management and auditor’s responsibilities - Pg 275 (Text book)
2. Objectives of internal controls - Pg 274 (Text book)
3. Components of internal controls - Pg 277 (Text book)
4. Evaluation of internal controls - Pg 287 (Text book)
5. Assessment and documenting understanding of internal controls - Pg 284-287 (Text book)

PART 3

Where are we?

1. Develop Audit Plan
2. Audit Fieldwork
3. Gathering Evidence - We are here !!!
4. Audit Report

Audit evidence - Pg 160 (Text book) 1| Video Chem|

1. Why Audit Evidence is needed?
2. What is Audit Evidence?
3. Sources of Audit Evidence
4. Persuasiveness / Quality of Audit Evidence
5. Characteristics of Reliable Information (Audit Evidence)
6. Types of Audit Evidence & Audit Procedures
7. Audit Documentation 
8. Cause of Why We Need Audit Working Papers (AWPs) & Effect of Not Having AWPs
9. Types of Audit Working Papers (AWPs)
10. Characteristics of Good Audit Working Papers (AWPs)

Additional materials

Sufficient appropriate audit evidence - Pg 162-163 (Text book)

Persuasiveness of audit evidence - Pg 162 (Text book)

Types of audit evidence - Pg 165 (Text book) 1|

Audit procedures - Pg 161 (Text book) 

1. Terms used in audit procedures 1|
2. Tests of controls vs Substantive tests Video AM|
3. Tests of controls - Pg 381 (Text book) 1| Video Auvengers|AM|
4. Substantive procedures - Pg 382 (Text book) 1| Video 5peeps|
1. Analytical procedures - Pg 211/383 (Text book) video TAT1|
2. Tests of details of classes of transactions - Pg 384 (Text book)
3. Tests of details of account balances and disclosures - Pg 384 (Text book)

Audit documentation - Pg 173-174 (Text book) 1| Video MG|

Types of files

• Permanent files - Pg 176 (Text book)
• Current files - Pg 177 (Text book)

Preparation of working papers Video RD|

Ownership and Confidentiality - Pg 175 (Text book) 1|

What is audit quality and how do you measure it? video AM|

STEP 7

1. Develop Overall Audit Program
2. Advantages of an Audit Programme

Additional materials

Audit programme - Pg 161 (Text book) 1| Video Delulu|

Types of audit programme: Standard and Tailored 1|