Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
PRELIMINARY PLANNING PROCEDURES UNDERTAKEN
The audit plan was prepared by the engagement team assigned to the audit of Blackstone Community Employment
Limited for the year ended 30 June 2014. The plan was prepared after completion of the following planning
procedures:
1. Review of prior year audit file and client correspondence file.
2. Attendance by engagement partner and audit manager at planning meeting with the Directors of the client
company.
3. Updating of the “UNDERSTANDING THE COMPANY AND ITS ENVIRONMENT, INCLUDING ITS INTERNAL
CONTROL” memorandum and a meeting of entire engagement team for assignment briefing and discussion in
relation to the assignment.
4. Completion of risk assessment procedures documented as part of the B section of the audit programme.
ENGAGEMENT REQUIREMENTS
In accordance with the requirements of company law we are to undertake a statutory audit of the
financial statements of the company. The audit will be conducted in accordance with International
Standards on Auditing (UK and Ireland).
KEY CONTACTS IN COMPANY
NAME
TOM DUFFY
MARY WALSH



RESPONSIBILITY
CHAIRMAN OF THE BOARD
DIRECTOR WITH RESPONSIBILITY FOR
FINANCE AND ACCOUNTS.
AUDIT RISK ASSESSMENT PROCEDURES UNDERTAKEN
Analytical Review.
Discussion and enquiries with the directors.
Considering the risk factors set out in Section B 4 of the audit programme.
RESULTS OF AUDIT RISK ASSESSMENT
Significant Audit Risk Identified
Planned audit response
As the company is reliant for most of its income
We will undertake a detailed review of the
on government funding, the application of the
resources the company has available to fund its
going concern basis to the preparation of the
activities into the future. It is likely that the
financial statements may not be appropriate or
company will not have certainty about future
uncertainties relating to the application of the
funding and in such a case we would expect the
going concern basis to the preparation of the
directors to disclose this uncertainty in the notes
accounts may need to be disclosed. This
to the financial statements. In the event of such a
situation is compounded by the fact that each
disclosure we will consider the adequacy of same
scheme runs for the calendar year and there is
in light of the other evidence gathered pertaining
no certainty until late in the current year that a
to application of the going concern basis. If the
future scheme will be approved for the next
disclosure is adequate, we will issue an
calendar year. At the date the accounts will be
unmodified audit report in relation to this matter
approved by the directors it would not be
but include an emphasis of matter paragraph
expected that government support would be
drawing attention to this disclosure. If the
guaranteed for a period of twelve months from
disclosure is inadequate we will have to consider
that date.
a modification to our audit report.
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
The risk that funding could be misappropriated
We will address this risk as follows:
 Obtain written confirmation from the
Department of Social Protection of grant
support provided to the company in the
year and reconcile confirmation to the
company's records.
 Confirm that the participants in the
scheme exist and were not falsified.
The risk that some of the public funding received
may be repayable due to non-adherence to
funding rules and that this liability will not be
reflected in the financial statements.
We will review the company's compliance with
the rules pertaining to the scheme to ensure that
a repayable situation does not exist. This will
include reading correspondence and agreements
entered into by the company with the Department
of Social Protection.
We will check that each scheme funding is ring
fenced and that the funding in each year is
correctly matched with the costs of the scheme in
the year concerned.
The risk that a deficit in the current year scheme
could be funded out of the following year’s
funding or that current year funding could be
used to meet a shortfall in the prior year scheme.
Significant Audit Risk Identified
Revenue recognition:
 The risk that income will not be
recognised in the correct financial year.
This risk is acute because the company
is likely to run schemes in concurrent
years and receive the initial funding for
the second year scheme at the end of
year one but not receive the last payment
for the current year until early in the
second year.
Management override resulting in the
management manipulating of accounting records
and preparing fraudulent financial statements by
overriding controls that otherwise appear to be
operating effectively.
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
Planned audit response
We will check if the first instalment of the second
year scheme was received in the current year. If
so, we will ensure that this payment is treated as
deferred income in creditors. In addition, we will
reconcile all receipts in the year to the current
year approvals and where the last payment is
outstanding at year end we will check that a
debtor is recorded for this amount.
We will address this risk as follows:
 Review appropriateness of journal
entries.
 Review journal entries to ascertain they
are appropriate and reasonable.
 Review accounting estimates for any
evidence of bias and consider if
reasonable (undertaken as part of
substantive audit work on accounting
estimates).
 Any significant transactions that are
outside the normal course of business for
the company will be evaluated as to
rationale (or the lack thereof) of the
transactions. We will be alert for any
evidence that suggests that they may
have been entered into to engage in
fraudulent financial reporting or to
conceal misappropriation of assets.
 Based on the results of planned work
consideration will be given to whether
other audit procedures in addition to
those specifically referred to above are
required.
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
SUMMARY OF AUDIT APPROACH TO MAJOR BALANCE SHEET AREAS
BALANCE SHEET CATEGORY
PLANNED AUDIT APPROACH
Fixed assets
Fixed assets are expected to be small. Fixed
asset additions to be vouched to invoice and
fixed assets inspection to be carried out. An
impairment review is unlikely to be necessary due
to the nature of the fixed assets.
In respect of depreciation, the audit approach will
be to carry out analytical review on the
depreciation charge and do substantive testing
(amount based on results of analytical review) on
depreciation calculations.
Debtors
Debtors at year-end are likely to be confined to
Department of Social Protection funding unpaid.
Verification of amounts due will be by vouching to
Department of Social Protection confirmation and
subsequent receipts.
Bank
In response to assessed risk of misstatement,
vouch bank reconciliation and obtain bank
confirmations. Carry out cut off work. Significant
substantive work can be undertaken in this area
with minimum input of audit team time. This work
will result in a very low level of detection risk
being achieved quickly and economically.
Creditors
Amounts due to trade creditors are likely to be
small and relate to materials purchased for the
scheme. As the materials budget for the scheme
is small, the creditor balance is likely to be small.
Carry out analytical review procedures and based
on results determine level of substantive testing
needed on trade creditors. Select all major
suppliers, unusual balances, significant balances
and debit balances for verification.
Accruals will be largely audited using analytical
review procedures, client enquiry and targeted
substantive testing arising from the results of
analytical review. Undertake significant work in
the search for unrecorded liabilities. PAYE to be
vouched and calculations during the year
reviewed. As stated above, the risk of grants
received becoming repayable requires special
attention.
Assessed risk is low as audit team has a detailed
knowledge of the company’s capital structure.
This knowledge does not indicate any changes in
the structure during the accounting period. The
response to the low assessed risk will be:
1. Review company register and agree
Member guarantee and reserves
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
details to accounts. In particular
ensure that the guarantee of the
members is disclosed.
2. Enquire from client if any changes in
capital structure during year. Review
all minutes of directors meeting and
members’ meetings.
3. Obtain search of company’s file in
the companies’ office and agree
details to financial statements.
4. Ensure the company has a minimum
of seven members at all times.
We do not expect the company to have any stock
at year-end.
Stocks
SUMMARY OF AUDIT APPROACH TO INCOME AND EXPENDITURE ACCOUNT
INCOME & EXPENDITURE LINE ITEM
Income
AUDIT APPROACH
The planned response to the assessed risk is:
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EXPENSES
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
Third party confirmation of Department of
Social Protection income.
Carry out analytical review procedures to
highlight unusual trends etc.
Undertake additional audit verification as
warranted having reviewed the results of
the above work.
Check cut off to ensure income is
accounted for in correct year.
Undertake programme of work on public
funding as set out in the audit
programme income section.
Prepare detailed analytical review. Use the
following as basis for comparison:
 Prior year figures.
 Non-accounting data where possible.
Prepare reconciliation of wages to P35.
Where trends / fluctuation cannot be explained
consider preparing analysis of the expense
account to determine reason for the unexpected
fluctuation.
Perform detailed checks of wage calculations.
Undertake programme of work as outlined in the
audit programme expenditure section.
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
LAW AND REGULATION
Law or Regulation identified
Company law
Revenue law
Department
of
Social
Protection
Community
Employment Regulations.
Related Audit Risk
Non compliance with company
law that could result in a
material misstatement in the
financial statements.
Exposure to additional tax,
interest and penalties that are
not accrued for in the financial
statements.
Exposure to possible repayment
of funding received from the
Department, where such
refunds are not accrued for in
the financial statements.
Employment law
Planned Audit Approach
Review of the company’s
compliance with company law.
Consideration of the company
exposure to VAT, PAYE/ PRSI
and Corporation tax and obtain
adequate evidence that there is
no exposure to these taxes or
where there is an exposure that
the financial statements contain
adequate provision for the tax.
 We will review
correspondence with
the Department to
identify any possible
issues that could give
rise to possible refunds.
 Obtaining written
representations on
possible noncompliance from the
Board.
 Request access to any
inspection / audit
reports prepared by the
Department in
connection with the
operation of the
scheme.
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

Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
Review
company’s
compliance
with
employment law.
Enquire with
management about any
areas of employment
law where non
compliance existed or
was identified.
Where non compliance
with employment law is
identified consider
implications for the
company and the
financial statements.
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
FRAUD
Type of Fraud
Susceptibility of the financial
statements to material
misstatements due to fraud
Planned Audit Approach to
address risk
Fraudulent financial reporting
(including incorrect revenue
recognition)
Risk assessment points to the
risk of a material misstatement
in the financial statements from
fraudulent financial reporting as
low. This is based on:
 The knowledge the firm
has of the client.
 Controls operated by
directors.
 The expected financial
outcome for the period
is predictable.
1. The planned substantive
based audit work will
reduce the risk of fraudulent
financial reporting going
undetected.
2. Analytical review.
3. Application of the
knowledge of the entity in
making an assessment of
the credibility of the final
financial statements.
4. Planned approach to
address error in revenue
recognition as outlined
above.
Misappropriation of assets
Risk assessment points to the
risk of a material misstatement
in the financial statements from
misappropriation of assets as
low. Due to the predictable
nature of the income streams
and expenditure it would be
difficult to conceal
misappropriation of assets.
1. The planned substantive
based audit work will
reduce the risk of
misstatement in the
financial statements from
misappropriation of assets.
2. Plan to request a copy of a
sample of returned paid
cheques to confirm validity
of the payments.
3. Plan to confirm existence
of scheme participants.
4. Analytical procedures.
Management override
While this is possible, the
planned audit response as
outlined above is adequate.
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
1. Overall planned audit work.
2. Risk will be considered
throughout the audit
process.
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
AUDIT STAFF
Partner
Manager
Staff member (s)
Joe Bloggs
Mary Bloggs
Joan Bloggs.
MATERIALITY (AS CALCULATED AT SCHEDULE B2)
Overall performance materiality.
€1,500
Specific performance materiality for separate
€500 for transactions between company and
classes of transactions (where applicable).
directors.
Specific performance materiality for separate
€500 for balances due by directors.
classes of balances (where applicable).
Specific performance materiality for separate
It is the policy of the firm to correct all disclosure
classes of disclosures (where applicable).
errors in excess of €100.
Matters regarded as trivial
€100
APPROACH TO PLACING RELIANCE ON INTERNAL CONTROLS
Due to small number of people involved in management of the entity, segregation of duties is limited
and therefore completion of the audit using a predominantly substantive approach is the audit
approach planned.
APPROACH TO COMPLIANCE WITH ETHICAL STANDARD FOR AUDITORS
We will complete Section B1 of the audit programme to identify any potential issues arising for the
firm in complying with the ethical standards. The overall approach of the firm to complying with the
requirements of the ethical standards will be documented in section B 1 of the audit file.
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
THIRD PARTY REPORTING REQUIREMENTS
During the course of the audit assignment, the audit team will consider the third party reporting
obligations set out below and where a reporting obligation is identified, the matter will be immediately
brought to the attention of the partner in charge.
Indictable offences
Where during the course of the audit we become
aware that a director, secretary, agent of the
company or the company may have committed
an indictable offence under the Companies Act
1963 to 2013 this should be reported to the
Director of Corporate Law Enforcement.
Proper books of account
If the auditor forms the opinion that proper books
of account are not kept, then we are required to
notify both the company and not later than 7 days
after notifying the company notify the Register of
Companies of the situation. If auditor is of the
opinion that the directors have taken steps to
remedy the situation, then the Register need not
be informed under section 194 of 1990 Act. Staff
are aware that failure to maintain proper books of
account is potentially an indictable offence and
will be required to be reported to the Director of
Corporate Law Enforcement.
Criminal Justice (Money Laundering and
Terrorist Financing) Acts 2010 and 2013.
As our firm is a designated body under antimoney laundering legislation we are required to
report our suspicions where we believe that an
offence under this legislation has been
committed.
Criminal Justice (Theft and Fraud) Act 2001
We are required to report our suspicions to the
Garda where we believe that an offence under
the above act was committed.
Taxes Consolidation Act 1997
As auditor / tax advisor to the company we are
required to take the actions specified in the tax
acts where we become aware that a material
relevant revenue offence under the Act has been
committed.(see section 1079 of Tax Act)
ASSIGNMENT TIMETABLE
Task
Date
th
Commence assignment.
Issue standard audit request letters:
 Bank letter,
 Audit planning letter,
 Solicitor request letter.
30 September 2014
th
30 September 2014
Responsible individual review.
Issue financial statements for approval by
directors.
Sign audit report.
7 October 2014
th
8 October 2014
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
th
th
15 October 2014
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
AUDIT PLAN REVIEWED AND APPROVED BY:
MANAGER
PARTNER
SIGNATURE
MARY BLOGGS
JOE BLOGGS
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014
DATE
TH
30 SEPTEMBER 2014
TH
30 SEPTEMBER 2014
Audit Plan
Client Name: Blackstone Community Employment Limited
Accounting Period Ended: 30 June 2014
AUDIT PLAN REVISIONS
Revisions to audit plan.
th
No revisions required – 15 October 2014
Partner
Date
JOE BLOGGS
Manager
MARY BLOGGS
30
TH
SEPTEMBER 2014
30
TH
SEPTEMBER 2014
Date
Prepared by: Tom Duffy
th
Date: 25 September 2014
Reviewed by: Mary Bloggs and Joe Bloggs
th
Date: 30 September 2014