The Planning of the Audit guarantees the design of a strategy adapted to the conditions of each entity based on the information gathered in the Pre-Exploration stage.
In this process, all the Audit work is organized, the people involved, the tasks to be carried out by each of the executors, the necessary resources, the objectives, programs to be applied among others, it is the moment to plan to guarantee success in the execution Of the same.
The following article presents the most important elements of this stage in order to achieve the fulfillment of the objectives and the best execution of the Audit.
Introduction
The audit procedures are not standardized and those used are selected because they have particular significance with the engagement objectives.
When the audit is properly planned, the overall strategy for the examination is developed.
It is essential that the auditor is deeply familiar with the entity. Adequate planning includes that the auditor acquires an understanding of the operational nature of the business, its organization, location of its facilities, sales, productions, services rendered, its financial structure, purchase and sale operations and many other matters that could be in which you are going to audit.
You must also know in advance the degree of confidence that can be had in internal control, conditions that may require an extension of the audit tests, and in particular the interests of the top management.
Often the level of knowledge acquired by the auditor is lower than that possessed by management, but should be sufficient to enable the auditor to plan and carry out the examination in accordance with generally accepted auditing standards.
To acquire the necessary level of knowledge the auditor can use:
- The preliminary exploration carried out with their corresponding working papers. Previous audit work papers Previous experiences of other auditors who have performed audits Review of the entity's financial statements
goals
The analysis of the elements obtained in the exploration should lead to:
- Define the aspects that should be objects of verification, by the expectations that the exploration gave, as well as determine the areas, functions and critical matters Analyze the reiteration of deficiencies and their causes Define the forms or means of verification that are going to be used.Definition of the specific objectives of the Audit. Determination of the auditors and other specialists that are required, taking into account the proposed objectives, the magnitude of the work and its complexity. Flexible programs specifically made, in accordance with the objectives set, that respond to the verification of the three E's (Economy, efficiency and effectiveness). Determination of the time that will be used to carry out the Audit, as well as the estimated cost.
Planning
All planning must be well documented and include the Audit Program. This consists of the description of the audit procedures to be followed in the development of the same to achieve the objectives of the examination.
Although the audit program is developed as expertly as possible during the preliminary planning stage, it may be necessary to modify the procedures as additional information is acquired during the course of the engagement.
The information system of the audited entity and internal accounting controls have a significant impact on the design of the audit program.
The auditor should avoid the inclination to follow a procedure just because it appears in a generalized program.
These programs are used as guides only, the auditor must ensure that no important review procedure has been overlooked.
Either by adapting the overall program or by preparing a custom program, the auditor must be sure that the needs of each engagement are met.
The timely appointment of the auditor contributes to proper planning.
In effect, planning requires the auditor to carry out certain procedures in due time, especially having a preliminary examination on time and with a clear and precise illustration that allows coordinating the activities to be carried out to fulfill the audit program in question.
The fundamental work at this stage is to define the strategy to be followed in the audit to be undertaken.
Work programs may vary in form and content depending on the nature of the work.
The internal auditor when planning the Internal Audit must obtain an understanding of the importance and complexity of the activities of the established automated information system and the availability of data for its use.
This understanding includes such matters as:
- importance and complexity of automated processing in each important operation object of the Internal Audit. Importance refers to the most relevant items affected by automated processing; an operation can be considered complex when, for example:
a) the volume of transactions is such that users find it difficult to identify and correct errors in processing;
b) the system automatically generates material transactions directly to another application;
c) the automated system performs complicated financial information operations and / or automatically generates transactions of relative importance that cannot be (or are not) independently validated; and transactions are exchanged electronically with other organizations and internally within the entity.
- The structure of the automated information system, the degree of concentration and distribution of automated processing throughout the entity may affect the segregation of duties; the availability of data includes source documents and other evidence materials that may be needed by the auditor. internal, which exist or not for a short period of time or only in a readable form by the automated system; and the automated information system can generate useful internal reports to carry out the Internal Audit.
This entails planning the issues to be executed, in such a way as to ensure that a high quality audit is carried out and that it is achieved with economy, efficiency, effectiveness and due promptness.
Development
Starting from the objectives and scope foreseen for the audit and considering all the information obtained and knowledge acquired about the entity in the exploration stage, the group leader proceeds to plan the tasks to be carried out and the necessary checks to achieve the audit objectives.
Likewise, it must determine the relative importance of the issues to be audited and reassess the need for personnel in accordance with the elements available to it.
After the time to be used in the execution of each verification or verification has been determined, the overall or general audit plan is prepared, which must be included in a document that contains at least:
- Definition of the topics and tasks to be carried out. Name of the specialist (s) who will intervene in each of them. Expected start and end date of each task. In this case, it is considered from the exploration to the conclusion of the work.
Likewise, the individual work plan of each specialist is drawn up, considering at least:
- Name of the specialist. Definition of the topics and each of the tasks to be performed. Start and end date of each task.
Any extension of the planned term must be authorized by the supervisor or another higher level; leaving a record in the audit file.
At the discretion of the group leader, both the general audit plan and the individual plan for each specialist can be included in a single document based on the number of tasks to be performed, the number of subordinate specialists, etc.
Regardless of the variant used, the group leader must consider the essential columns to record the real execution period in each task, as well as the space necessary to record incidents in each task / specialist or the topic as a whole; Consigning the appropriate comments or non-compliance with the established term, if it exists.
A Planning Model designed to carry out planning can serve as support, in which the preparation and identification of the work paper could also be conceived.
Based on the knowledge of their individual plan, each specialist breaks down the assigned work into subtasks, (if applicable) respecting the established term; reflecting the same a Daily Task Control Model, an aspect that must be known to the group leader.
In all audits these plans must be discussed with the supervisor, who must be aware of them.
Likewise, specialists must be imposed by the general audit plan, which would result in a much more effective collective work.
All of the above allows to follow the execution of each job and to determine if they are fulfilled in the expected time.
Responsible: Group Leader and / or Auditor
Standards:
Planning must be carried out which, at the discretion of the audit group leader, will execute it from the organization of the group work, that is, it can plan:
a) by Topics, to each auditor
b) by Group and Subject, to each auditor
c) by Auditor and Subject and / or Group
Controls:
The group leader must carry out reviews, and monitoring, in the different stages or works carried out by subordinate auditors, in order to advise the work, in order to detect faults, insufficiencies and deficiencies in time, and before the completion of the audit.
It must also carry out supervisions, leaving evidence of it, in the Supervision Act established in this Manual (see document in the Institutional Stationery Manual).
Risks:
Poor planning can occur as a consequence of:
- Extension of tests without meeting the necessary objectives to carry out the orderly Audit. O The general strategy for the examination is developed. Inability to create or adapt the Audit Program. Inadequacies and failures in the Preliminary Exploration. Not full knowledge of the activity to be carried out. Little experience in the application of the ordered Audit program.
