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What is an Audit Strategy?An audit strategy sets the direction, timing, and scope of an audit. The strategy is then used as a guideline when developing an audit plan. By developing an audit strategy, it is easier to create a more targeted audit plan, thereby wasting less time in total during the planning phase of an audit. The strategy document usually includes a statement of the key decisions needed to properly plan the audit. The audit strategy is based on the following considerations:
The audit strategy could be relatively short for the audit of a smaller entity, perhaps in the form of a brief memo. If there are unexpected changes in conditions or the outcome of audit procedures, it may be necessary to alter the audit strategy. If there is an alteration, the reasons for the alteration should be stated in the accompanying documentation. The Difference Between an Audit Strategy and Audit PlanAn audit plan states the detailed steps to be followed in the conduct of an audit. The plan includes risk assessment procedures, as well as additional procedures to be followed based on the outcome of the risk assessment. The audit plan is much more detailed than the strategy document, since the plan states the nature, timing, and extent of the specific audit procedures to be conducted.
Terms in this set (44)In considering materiality for planning purposes, Ash, auditor believes that misstatements aggregating P60,000 would have material effect on an entity's income statement, but that misstatements would have to aggregate P40,000 to materially affect the balance sheet. Ordinarily, it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate: a. P40,000 Students also viewedSets found in the same folderOther sets by this creatorRecommended textbook solutions
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Terms in this set (159)In what order should the following steps occur? Students also viewedSets found in the same folderOther sets by this creatorRecommended textbook solutions
Other Quizlet setsWhich of the following should an auditor consider when developing an overall audit strategy?Which of the following matters should be considered by the auditor in developing the overall audit strategy? In developing the overall audit strategy, the focus of the engagement team's efforts is considered.
What is an overall audit strategy?Overall audit strategy sets the scope, timing and direction of the audit, and guides the development of the more detailed audit plan. The auditor shall establish an overall audit strategy that sets the scope, timing and direction of the audit, and that guides the development of the audit plan.
What are the matters to be considered by the auditor in developing the overall audit plan?. 10 The auditor should develop and document an audit plan that includes a description of: The planned nature, timing, and extent of the risk assessment procedures; The planned nature, timing, and extent of tests of controls and substantive procedures;12 and.
What should be included in an audit strategy?The audit strategy is based on the following considerations:. The scope of the engagement.. The characteristics of the engagement.. Reporting objectives.. Timing of the audit.. Nature of communications.. Significant factors in directing engagement team efforts.. The results of preliminary engagement activities.. |
