Audit plan
The audit plan, or more accurately, the tactical audit plan [fn], is a description of the expected scope and
conduct of the audit. Auditors initially prepare the tactical audit plan during the audit planning stage, but may revise the plan throughout the audit. As the tactical audit plan is important evidence that the
audit will be carried out in accordance with auditing standards and
practice statements, auditors document the tactical audit plan in the
audit working papers. The tactical audit plan
includes the documentation of:
- the audit approach for each
material account balance assertion and the basis for its
determination. Where an in-depth approach for any account balance
assertion has been selected, the audit approach in respect of each
related class of transaction is also documented.
- the time and activity budget, indicating the evidence which
each audit staff member is to gather and evaluate, when it is to be
gathered and the expected time to be spent on such activity.
- the staff planning schedule, indicating when and for how long
audit staff members have been scheduled to work on the engagement
and what work they have been scheduled to do. It may be expressed
in hours or other units of time and then costed at the audit firm's
standard rate for each staff member, to provide a budgeted standard
cost for the entire audit engagement.
- (optionally) an audit stage planning schedule, setting out the
weeks (or months) during which the audit team will perform work in each audit stage and the estimated time the audit team will spend on each activity in each audit stage.
See examples of time and
activity budgets.
The auditor briefs the engagement team on the contents of the tactical audit plan and ensures each staff member has a proper understanding of the susceptibility of
the entity’s financial statements to material misstatements as well as his/her duties and
responsibilities. Details of this discussion, along with the tactical audit plan, are documented in the audit working papers.
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