Audit Plan

An audit plan is more detailed than the strategy and sets out the nature, timing, and extent of audit procedures (including risk assessment procedures) to be performed by engagement team members to obtain sufficient appropriate audit evidence.

Planning the audit includes establishing the overall audit strategy for the engagement and developing an audit plan, which includes, in particular, planned risk assessment procedures and planned responses to the risks of material misstatement.

Planning is not a discrete phase of an audit but, rather, a continual and iterative process that might begin shortly after (or in connection with) the completion of the previous audit and continues until the completion of the current audit.

A good plan and actual control of the work as per the plan will prove to be valuable evidence that the audit has been carried out according to generally accepted auditing practices if the plan and controls exercised are adequately documented.

The audit plan should cover mainly the following;

1. Determining the scope of the audit;
2. Gaining knowledge of the clients accounting system;
3. Gaining knowledge of clients internal control system;
4. Determining the program of audit, fixing up time schedules and nature and extent of audit procedures to be carried out;
5. Manpower planning.

The control of the audit seeks to ensure that the work is carried out as intended.

Auditor exercises control over the quality of audit by effective supervision of the work of his assistants, coordination of work performed by others and adequately documenting the audit matters and manner.

The auditor should develop and document an audit plan that includes a description of:

1.      The planned nature, timing, and extent of the risk assessment procedures;

2.      The planned nature, timing, and extent of tests of controls and substantive procedures; and

3.      Other planned audit procedures required to be performed so that the engagement complies with PCAOB standards.