For explaining audit planning, AAS 8 was made. Like planning of any work, audit work should be done on the basis of perfect plan. An auditor should make the audit plan statement when he starts the audit of a company. In this statement, he should mention the answers of following questions.
Every answer will be step of audit planning.
Question 1. When will audit start?
Answer : Time of starting audit should be determined because delay in the starting of audit work will delay in completion. Auditor should fix it in advance. For example, audit will start from 2nd jan. 2014.
Question 2. Who will be in the team for an audit?
Answer. Auditor is just like a doctor who have lots of clients like doctor has lots of patients. It will be easy for auditor if auditor will fix the team for auditing work. In this team, auditor should write his employees name. Employees should also be informed about their audit duty in advance.
Question 3. How will audit to be done?
Answer. Auditor should fix the steps which will be taken in practical of audit work. For example which accounting information will be verified. Is it be sample base or not? Name of officers and employees of company which will be involve in audit discussion.
Question 4. How much time will spend for completing the audit?
Answer. Auditor should fix the total time which will be used for audit completion.
Question 5. If there is technical matter which is outside of his accounting, auditing and taxation area, from where will auditor get expert advice?
Answer. Today, time is of information technology. Businesses are done through ecommerce. If auditor has to audit an e-commerce company, there may be the need of web or mobile developer to know some technical knowledge relating to online business transactions. At that time, auditor should write the name of such developer in the report after fixing the cost and other matters relating to his audit case.
Question 6. What will be the significant area of audit?
Answer. There is big area of audit, auditor should limit his scope of audit according to the nature and area of business of company.
Question 7. What will be the purpose of audit?
Answer. Auditor should fix also the purpose of audit. For example, few days ago, I obtained the call from CA from Delhi. He was interested to know the treatment of corpus fund treatment in the financial statement. Few years ago, I wrote on this topic, I could not at that time what I wrote at that time. So, I took sometime from him. Actually, that auditor's aim was very clear, he wants to know what is the base of my writing. Whether, I have written on any court's decision or follow any accounting standard for calculation of corpus fund. After study it again, I can tell it was only on the basis of my research. Actually, I want to say, if any auditor has fixed his purpose of audit, he will reach fastly at his result of auditing. He will do work in right direction. He will search for only fulfilling his purpose. Without fixing the purpose, he may waste his time and energy to complete the audit.
Question 8. Will we use internal audit report for auditing?
Answer. For this, he should check the quality of internal audit.
Question 9. How will auditor allocate the work of audit between joint auditors?
Answer. For this, he should discuss with company and other auditors.
Question 10. What main documents which will use for audit?
Answer : It may be just financial statements and voucher but for deep audit, audit can use each document of company. But its list should be mention in the answer of this question.
When auditor will write the answer of these questions or all the other questions which he will include, this audit plan statement will become helpful
a) To complete audit on the time.
b) To identify the problems of audit.
c) To increase the co-ordination between other auditors.
Related : List of AAS