Question

Demonstrate the planning process for a complete audit from the role of an auditor with a brief description of each step and how it would be conducted.

Answer 1

The audit planning phase includes procedures such as gaining an understanding of the client and its business, making risk and materiality assessments, determining an audit strategy, and determining the type of evidence to collect, based on the risk levels.
Audit planning is important because auditors should plan the audit so as to reduce audit risk to an acceptably low level that is consistent with the objective of the process.

Research the Audit Area
Research the process or function to fully understand the subject matter. Review internal procedures, search the internet for resources, and seek help from subject matter experts.

Maintain Open Communications Throughout the Planning Process
Working with an auditee prior to the audit helps ease concerns the auditee may have. Communicating in person is always preferable. If this is not possible, telephone calls are the next best thing.

Conduct Process Walk-Throughs
Identify key business objectives, methods employed to meet objectives, and applicable rules or regulations. A walkthrough may include a tour of facilities. May gather background information relative to the nature, purpose, volume, size, or complexity of automated systems, processes, or organizational structure.

Map Risks to the Organization, Process, or Function
Rate risks with the auditee based on probability of occurrence and potential impact. Consider control design, gaps, or mitigating factors to determine if the control system effectively mitigates risks.

Obtain Data Prior to Fieldwork
Perform data analytics before begin field work. Identifying anomalies to confirm a condition or weakness early helps to target testing and optimize sample selections.