- 5 Marks
Question
International Standards on Auditing, ISA 300 requires the Independent auditor to plan the audit of the financial statements so that the engagement will be performed in an effective manner.
Required:
State the benefits of audit planning to the independent auditor.
Answer
- Ensures Focus on Important Areas: Adequate planning helps ensure that the auditor dedicates appropriate attention to significant and high-risk areas of the audit.
- Early Problem Identification: Audit planning allows for the identification and timely resolution of potential issues before the audit process is far advanced.
- Improves Audit Efficiency: Proper planning ensures that the audit is organized and managed effectively and efficiently, leading to better allocation of resources and time.
- Facilitates Team Coordination: It helps with assigning appropriate work to audit team members, ensuring smooth coordination and proper supervision of their work.
- Establishes Foundation for Future Audits: It lays a strong foundation for future audits by improving understanding of the client’s business and previous audit findings.
- Tags: Audit Planning, Audit strategy, ISA 300, Risk Mitigation
- Level: Level 2
- Topic: Planning an Audit
- Series: NOV 2018
- Uploader: Kwame Aikins