Audit planning: stages and key principles

Audit planning is a process of preparation for the immediate conduct of an audit of an economic entity. At this stage, the specialist determines the characteristics and characteristics of the client's business, on the basis of which he selects specific methods and techniques for carrying out the work.

The auditor should approach the planning stage with all responsibility, since any mistake or defect makes all further work ineffective and useless. In addition, it is worthwhile to understand that the result of verification under such circumstances will be distorted. The current legislation regulates audit planning. Federal standards require the development of a common strategy and a detailed tactical plan for its implementation. But the normative documents contain only general rules for conducting the audit, detailed information each audit firm develops independently and fixes in the constituent documents.

The audit planning should follow the main principles:

• Optimality;
• Complexity;
• continuity.

The first principle presupposes the existence of several versions of the audit methodology, which allows you to choose the most rational and suitable for the company of each business entity.

Complexity means that all methods and methods of audit activity should be aimed at achieving the main task, and the stages of verification are to interact with each other.

Accordingly, the principle of continuity implies the organization of work, in which each auditor of the created group clearly performs the task assigned to him, which ensures the continuity of the verification process.

When planning an audit, it is necessary to compile such documents as a letter on the implementation of the audit, a contract with the auditor for the provision of services, financial statements of the legal entity, strategic and tactical plan. First of all, you should listen to the client, find out what he expects from the audit, what aspects he cares about first, and also find out if there are significant circumstances that may or may have an impact on the company's performance. Then the specialist conducts a preliminary audit of the balance sheet in order to identify suitable methods for a thorough examination of the financial documentation in the future. That is, the stage of gathering information about an economic entity comes. The auditor has the right to interview the client's staff, find out the information directly from the head or obtain information from third parties.

After assessing the efforts and labor costs for a particular client, the audit organization decides on the desirability of cooperation with it and establishes the specific cost of its service. This information she informs the legal entity in the letter about the inspection. But the audit firm can start work only after a response letter, which is made in the form of consent or request, and the signing of a bilateral treaty.

At the stage of drafting a strategic and tactical plan, compulsory audit of accounts is carried out, and the system of internal control of the enterprise is assessed. The specialist on the basis of the data obtained determines the permissible limit of distortions and errors, and also assesses the level of risk, that is, the possibility of issuing an opinion as a final result that is not true. The auditor has the right to consult with colleagues on specific issues or consult more competent specialists. And at the final stage, the order of the head of the audit firm approves the group that will implement the developed verification programs.