What are the elements of audit planning?
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Audit planning is the essential first step in the audit process, the foundation of a successful audit. Plan effectively, and your entire audit workflow will be made smoother and swifter. Get the process right, and your fieldwork, analytics, issue management and reporting will be more robust, comprehensive and accurate. Planning enables you to identify the key risks and controls your audit should cover, ensuring nothing is missed. The benefits cannot be underestimated. “Fail to plan and plan to fail” is a well-known maxim: but what should the audit planning process be? What does best practice look like? There are numerous factors to consider when planning an audit; here, we look at what they are, examine the benefits of the audit planning phase, and explore what audit planning software should deliver to help. What Is Audit Planning?Internal audits and control are vital, but they can be costly and complex without the proper structure. Whether you are auditing for your internal control purposes or complying with external regulations like Sarbanes-Oxley, effective audit planning enables you to bring order to the process and focus on the right risks to drive strategic insight. Audit planning should be your first step when starting an audit. Done effectively, it will drive efficiency across your entire audit workflow; it should encompass the audit’s scope, nature, and timing. Planning your audit ensures that all areas of the process are covered and given appropriate attention. It can also help you identify any potential problems or obstacles with the auditing process, map out activity so that it is carried out in a timely way, and manage your audit workflow for maximum efficiency.Why Is It Important?Businesses today face numerous and evolving risks. Effective audit planning ensures that you measure the right risks — and as a result, derive the strategic insights you need to manage and mitigate the threats your business faces. In a world of ever-increasing governance, risk and compliance obligations, your audit process cannot be a tick-box exercise. It’s a real-world measurement of your ability to manage your business processes and policies and the controls you put in place to measure them. Your audit process needs to deliver value to your board and top executives; effective audit planning will allow you to achieve this.Benefits of Audit PlanningTaking the necessary steps will:
What Is Best Practice in Audit Planning?So you’ve identified audit planning as the holy grail for a successful audit. What happens next? — you may be wondering how to do it, what the essential steps are and whether you can draw on a best practice example to help you.5 Best Practice Steps
Best Practice and Audit Planning ToolsBest practice audit planning will cover the steps above, giving you complete oversight of your risk landscape and the controls that your organization uses to manage its risks. Many businesses are turning to audit planning tools and audit management software to manage this planning process and the broader audit. Employing software can bring structure and rigor to the audit, including your audit planning process; good audit workflow software supports planning, scheduling and project management, and document management — capturing a library of past audits and templates that minimize rework and maximize consistency. The latest audit software can be used offline or via apps, enabling you to conduct planning and fieldwork on-site. Harness technology to send requests and reminders to members of the audit team, and speed reviews and sign-offs. From planning through to the entire audit, the innovation and technology characterized by Diligent’s audit solutions are making the modern audit process quicker, simpler and more reliable. You can keep up to date with all the latest innovations in audit planning, audit processes and audit technologies — as well as other governance, risk and compliance hot topics, in Diligent’s GRC Newsletter. You can sign up for the newsletter here.What are the steps of audit planning?Audit Process. Step 1: Planning. The auditor will review prior audits in your area and professional literature. ... . Step 2: Notification. ... . Step 3: Opening Meeting. ... . Step 4: Fieldwork. ... . Step 5: Report Drafting. ... . Step 6: Management Response. ... . Step 7: Closing Meeting. ... . Step 8: Final Audit Report Distribution.. What is audit planning?"Audit planning" means developing a general strategy and a detailed approach for the expected nature, timing and extent of the audit. The auditor plans to perform the audit in an efficient and timely manner.
What are the types of audit planning?Different types of audit. Internal audit. Internal audits take place within your business. ... . External audit. An external audit is conducted by a third party, such as an accountant, the IRS, or a tax agency. ... . IRS tax audit. ... . Financial audit. ... . Operational audit. ... . Compliance audit. ... . Information system audit. ... . Payroll audit.. What are the key elements of an audit finding?What is an audit finding?. Condition: What is the problem/issue? What is happening?. Cause: Why did the condition happen?. Criteria: How do we, as auditors, know this is a problem? What should be?. Effect: Why does this condition matter? What is the impact?. Recommendation: How do we solve the condition?. |