Audit Planning
&
Audit Evidence
SLAuS 7 – Audit Planning
• The auditor should plan the audit work
so that the audit will be performed in an
effective manner.
• "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.
SLAuS 7 – Audit Planning
Importance
• Appropriate attention is devoted to
important areas of the audit,
• Potential problems are identified
• Work is completed expeditiously.
• Proper assignment of work to assistants
and in coordination of work done by other
auditors and experts
SLAuS 7 – Audit Planning
Extent of Planning
• The size of the entity,
• The complexity of the audit
• The auditor's experience with the entity
and knowledge of the business.
SLAuS 7 – Audit Planning
The Overall Audit Plan
• The auditor should develop and
document an overall audit plan
describing the expected scope and
conduct of the audit
SLAuS 7 – Audit Planning
The Overall Audit Plan
• Matters to be considered by the auditor
– Knowledge of the Business (economy, entity
and management)
– Understanding the Accounting and Internal
Control Systems (accounting + ICs)
– Risk and Materiality
– Nature, Timing and Extent of Procedures
– Coordination, Direction, Supervision and
Review
– Other Matters (Going concern, Related parties)
SLAuS 7 – Audit Planning
The Audit Program
• The auditor should develop and
document an audit program setting out
the nature, timing and extent of planned
audit procedures required to implement
the overall audit plan.
SLAuS 7 – Audit Planning
Changes to the Overall Audit Plan and Audit
Program
• The overall audit plan and the audit program
should be revised as necessary during the
course of the audit.
• Planning
is
continuous
throughout
the
engagement because of changes in conditions or
unexpected results of audit procedures. The
reasons for significant changes would be
recorded.
SLAuS 4 – DOCUMENTATION
• The auditor should document matters which
are important in providing evidence to
support the audit opinion and evidence that
the audit was carried out in accordance with
Sri Lanka Auditing Standards.
• "Documentation" means the material (working
papers) prepared by and for, or obtained and
retained by the auditor in connection with the
performance of the audit. Working papers may
be in the form of data stored on paper, film,
electronic media or other media.
SLAuS 4 – DOCUMENTATION
Working papers:
• (a) assist in the planning and performance
of the audit;
• (b) assist in the supervision and review of
the audit work; and
• (c) record the audit evidence resulting from
the audit work performed to support the
auditor's opinion
SLAuS 4 – DOCUMENTATION
Form and Content of Working Papers
• The auditor should prepare working papers
which are sufficiently complete and detailed
to provide an overall understanding of the
audit.
• The auditor should record in working papers
information on planning the audit work, the
nature, timing and extent of the audit
procedures performed, the results thereof,
and the conclusions drawn from the audit
evidence obtained.
SLAuS 4 – DOCUMENTATION
Permanent Vs Current Audit Files
• In the case of recurring audits, some
working paper files may be classified as
"permanent" audit files which are updated
with new information of continuing
importance as distinct from current audit
files which contain information relating
primarily to the audit of a single period.
SLAuS 4 – DOCUMENTATION
Confidentiality, Safe Custody, Retention and Ownership
of Working Papers
• The auditor should adopt appropriate procedures for
maintaining the confidentiality and safe custody of
the working papers and for retaining them for a
period sufficient to meet the needs of the practice
and in accordance with legal and professional
requirements of record retention.
• Working papers are the property of the auditor. Although
portions of or extracts from the working papers may be
made available to the entity at the discretion of the
auditor, they are not a substitute for the entity's
accounting records.