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ACTIV- ITIES |
STAGES | ||||
|---|---|---|---|---|---|
| CA/R | AP | CT | ST | OF | |
| PL | SP | TP | OP | OP | OP |
| EG | PK | DK | EofO | EofM | CFS |
| EE | AR1 | DR*2 | DR*3 | AR4 | AR5 |
| DM | A/R | AA | CR? | CAB | AO |
Planning activities in the In the substantive testing stage comprise operational planning as the plans are subject to revision at any time during the audit. In auditing, operational planning is the activity of determining what and how much evidence the auditor requires to be gathered and evaluated, and when, how and by whom it should be gathered and evaluated. In other words, operational planning is the preparation, and revision, of the audit program for the engagement. For existing audit engagements, the audit program for an account balance is revised if the audit approach has changed from the previous year [fn].
In the substantive testing stage, operational planning refers to the preparation of that part of the audit program dealing with evidence gathering and evaluation activities to be applied during the substantive testing stage. The objective of these activities, and the objective of this substantive testing stage, is to determine whether the (achievable) audit risk for material account balance assertions exceeds the acceptable level. Thus, auditors plan to gather evidence in relation to:
If, for any one account balance assertion, the achievable level exceeds the acceptable level then the auditor concludes that there is an unacceptable risk that the account balance is not materially complete, valid or accurate.
After the audit program is documented, the auditor gathers the evidence referred to in the audit program. This relates primarily to the achievable audit risk at the account balance level which is based on the extent of misstatements in each material account balance assertion. Refer to next activity.
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