AUDIT PLANNING

PSA 200, “Overall Objectives of the independent auditor and the conduct of an audit in accordance with Philippine Standards on Auditing” “The auditor should plan and perform an audit with professional skepticism recognizing that circumstances may exist that cause the financial statements to be materially misstated.”

* Overall Strategy

* Audit plan

Preliminary Audit Engagement 1. Perform procedures regarding the continuance of the client relationship and the specific audit engagement 2. Evaluate compliance with ethical requirements, including independence. 3. Establish an understanding of the term of engagement.
Benefits of Audit Planning 1. It helps ensure that appropriate attention is devoted to important areas of the audit. 2. It aids in identifying potential problems and resolving them on a timely basis. 3. It helps ensure that the audit is properly organized, managed and performed in an effective and efficient manner. 4. It assists in the proper assignment and review of the work of the engagement team members. 5. It helps coordinate the work to be done by auditors of components and other parties involved such as experts, specialists, etc.
The Overall Audit Strategy sets the Scope, Timing & Direction of the Audit
SCOPE
1. The financial reporting framework 2. Industry specific reporting requirements, and 3. The locations of the components of the entity.
TIMING
1. Deadlines for interim and final reporting, and 2. Key dates for expected communications with management and those charged with governance.
DIRECTION
1. Determination of appropriate materiality levels 2. Preliminary identification of areas where there may be higher risks of material misstatement. 3. Preliminary identification of material components and account balances. 4. Evaluation of whether