Prepared by Marzanur Rahman

Audit Planning and Control Evaluation

Audit Planning and Control Evaluation

We have discussed regarding audit planning process in our previous session. Here, we will be focusing on planning procedure. We will what planning activity we need to perform as per Audit Practice Manual (APM)

Audit Planning and Control Evaluation

Sl No. Document Title Reference No.

1 Audit Planning Summary C12 Acceptance Procedures C1.13 Audit Planning Checklist C24 Audit Planning Memorandum C35 Audit Planning Notes C46 Systems and Internal Control Summary C57 Review of Design And Implementation of internal

Controls C5.18 Audit Risk Summary C69 Audit Risk Checklist C6.1

10 Risk Response Summary C6.211 Specific Risk Action Plan C6.312 Detailed Risk Assessment C6.413 Preliminary Analytical Review C714 Materiality Summary C815 Comparison of Financial Statements C8.116 Accounting Work Planning  17 Sample Size Planning C9.218 Assignment Planning C9.319 Budget and Performance Summary C9.420 Job Progress Report C9.521 Opening balance and Comparative Checklist C 10

Audit planning summary – C1

An overall strategy for audit has been established

An audit plan has been developed to reduce risk

Fraud risks have been consideredOverall strategy and audit plan have been

properlydocumentedAcceptance procedures are followed

properlyAudit planning checklist is followed

Professional skepticism

Acceptance procedures –C1.1

We have discussed on acceptance procedure in our previous session

Audit planning checklist – C 2

Strategic consideration – Financial reporting framework, industry specific requirements, group reporting etc.

Client back ground- ‘know your client checklist’, significant accounting policies etc.

Laws and regulations Audit risk General – materiality, external

confirmations, opening balance checklist, audit program etc.

Quality control- Ethical requirements, partner’s review, cold review etc.

Planning memorandum C-3

Background information Scope of engagement Key personnel Timetable Key risk and responses at financial

statements level Key risk and responses at assertion level Outline the audit approach to the above

areas

Notes of planning meeting – C4

• Attendees and date of meeting• Susceptibility of entity’s financial

statements to• material misstatement• Susceptibility of the entity to fraud• Other matters

Systems and internal controls summary – C 5

Complete the basic questionaries' Document relevant systems and control Significant weaknesses and specific risk

action plan Internal control evaluation

Review of design & implementation of internal controls – C 5.1

• Business area – FA, Payable etc.• Outline of information systems and

controls• Comment on implementation of controls• Client’s comments• Further testing required ?

Audit Risk Summary – C 6

The audit risk checklist (C.61) Risk response (C6.2) and risk action plan

(C.03) for risks that may result in a material misstatement

Overall risk assessment at FS level

Audit risk checklist – C 6.1

It is a guide to monitor whether appropriate risk response, risk action plan and overall risk at FS level have been considered to reduce the risk at an acceptable level.

Risk response summary – C 6.2

Major risk factors of individual items e.g. tangible assets

Risk level ( High, Medium, Low) Justification of risk Audit approach and reference to program

Specific risk action plan C- 6.3

Specific risk affecting the client Risk level ( High, Medium, Low) Management response Financial reporting areas and assertions

affected Audit approach Outcome

Detailed risk assessment C-6.4

Industry conditions Regulatory environment Business operations Investments Financial reporting Fraud and error etc.

Preliminary analytical review – C 7Analytical procedures mean evaluation of financial information made by a study of plausible relationships among both financial and non financial data. It has been used as part of risk assessment and as part of the final review process. It may be used as substantive procedures also.

Technique of analytical review:

o Ratio analysiso Simple comparisonso Examining related accountso Reasonableness testso Trend analysis etc

Materiality summary C- 8

Range of turnover or gross assets

percentage of turnover or gross assets

Materiality ranges

TK.0-Tk. 500,000 3.00% Tk1-Tk.15,000

TK.500,001-Tk.1,000,000

2.50% Tk15,001-Tk.25,000

TK.1,000,001-Tk.2,000,000

2.00% Tk25,001-Tk.40,000

TK.2,000,001-Tk. 5,600,000

1.50% Tk40,001-Tk.84,000

Over Tk. 5,600,000 1.00% over Tk.84,000

Accountancy work planning – C 9.1

Key accounting head Material Journal entries Observe the ethical

operation Re-calculation and re-

perform Any Contingent issue

Sample size planning C-9.2

Basis of sleeting sample Deeming sampling

threshold Quantity of sample

Assignment planning – timetable C-9.3

Availability of accounting records Staff bookings Stocktaking attendance Bank confirmation, lawyer’s confirmation

and debtors and creditors circularization's Manager and partner review Draft FS and discussions with client Signed FS

Budget and performance summary C-9.4

Item-wise detail budgeted hours as per staff grade VS. Actual hours as per staff grade. Result: Proper planning, cost control and performance evaluation and identify the areas for improvement may be

Job progress report – C 9.5

• Monitor the execution as per plan • Find out the progress of the pan• Prepare action plan to solve the issue

Opening balance and comparatives checklist – C-10

• Closing balances have been correctly b/frw

• Accounting policies consistently applied?

Audit Planning and Control Evaluation

Audit Planning and Control Evaluation