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

PART 3

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

1. Sufficient appropriate audit evidence - Pg 162-163 (Text book)
1. Persuasiveness of audit evidence - Pg 162 (Text book)

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

PODCIARR 

1. Physical examination
2. Observation
3. Documentation
4. Confirmation
5. Inquiries of client
6. Analytical procedures
7. Recalculation
8. Re-performance

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

• Types of audit programme: Standard and Tailored 1|

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|

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)

Letter of weaknesses to management - Pg 294 (Text book) 1| Video Asia|

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