Audit plan and audit performing

Audit plan and audit performing - Audit plan and performing...

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Click to edit Master subtitle style 8/22/11 Audit plan and performing the audit
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8/22/11 Last time Materiality – something big enough or important enough to influence decision making Two types of materiality Planning materiality Preliminary materiality Tolerable misstatement Evaluative materiality
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8/22/11 Audit plan Document which is a result of the planning step of the audit Outlines strategy for the audit Created by the auditor
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8/22/11 Audit plan Includes information on: Understanding of the client’s organization and organizational processes Results of preliminary analytical procedures Risks of material errors and fraud (IR) Understanding of the client’s internal controls Materiality levels for planning purposes and tolerable misstatements Information on the division of the audit into related areas (cycles) and audit strategies for each: Planned level of audit risk (AR) Assessed inherent risk (IR) and control risk (CR) for each area Level of detection risk (DR) that must be achieved
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8/22/11 Audit plan Understanding the business: Background of the client History Products Competitors Clients Employees Suppliers
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Audit plan Preliminary materiality calculations Allocation of PM to accounts Divided overall process in cycles – one level of AR – example low (10%) Cycles/ Risks Sales cycle Financing cycle
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Audit plan and audit performing - Audit plan and performing...

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