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Chapter 53 4

1.4 Audit plan

The strategy sets the overall approach to the audit; the plan fills in the operational
details of how the strategy is to be achieved.

The audit plan should include specific descriptions of:

 the nature, timing and extent of risk assessment procedures.

 the nature, timing and extent of further audit procedures, including:

– what audit procedures are to be carried out

– who should do them

– how much work should be done (sample sizes, etc.)

– when the work should be done (interim vs. final)

 any other procedures necessary to conform to auditing standards.

1.5 Interim and final audits

Interim audit

 Completed part way through a client's accounting year (i.e. before the year-
end).

 Allows the auditor to spread out their procedures and enables more effective
planning for the final stage of the audit.

 Useful when there is a tight reporting deadline which increases detection risk.

Normally focus on:

 documenting systems

 evaluating controls

The interim audit can also be used to:

 test specific and complete material transactions, e.g. purchasing new non-
current assets

 test transactions such as sales, purchases and payroll for the year to date

 assess risks that will impact work conducted at the final audit

 attend perpetual inventory counts.

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