One of the vital areas of the audit that is primarily conducted at the beginning of the audit process to ensure that appropriate attention is given to important areas is the audit work plan or audit planning. Audit work plan simply means developing a general strategy and a detailed approach for the expected problems, nature, timing and extent of the audit. The auditor plans to perform the audit in an effective and timely manner.
10+ Audit Work Plan Templates in PDF | DOC
1. Audit work Plan
2. Internal Audit work Plan
3. Internal Audit Work Plan and Schedule
4. Sample Internal Audit Work Plan
5. Risk Assessment and Audit Work Plan
6. Executive and Audit Committee Work Plan
7. Annual and Long-Term Audit Work Plan
8. Finance and Audit Committee Annual Work Plan
9. Office of Audits Annual Work Plan
10. Audits Annual Work Plan in PDF
11. Audits Annual Work Plan in DOC
How to Create an Audit Work Plan?
Step 1: Determine the Subject
Make sure you identify the area that needs to be audited. This area may be any business function, system or any physical location. You must know the exact subject that is going to be audited before making your work plan.
Step 2: Define the Objectives of the Audit
The next step is to define the purpose of the audit. Deciding the step is very important as your work plan must have some objectives or goals that it wants to achieve. Laying down the objectives helps in providing motivation, the motivation to work hard and achieve those objectives. For instance, an objective might be to determine whether there are any changes in the program source code in a well-defined and controlled environment.
Step 3: Set the Scopes of the Audit
The next step includes the identification of the specific systems or a function or unit of the organization that is to be included in the review. For instance, in the above example, that is program changes, the scope statement may limit the review to a single application, a system or a limited period.
Step 4: Conduct Pre-Audit Plannings
This step involves conducting a risk assessment before using the actual work plan. This is critical in setting the final scope of a risk-based audit. In case of any other types of audits like compliance, performing a risk assessment is a good practice as the results can help the audit team to justify the engagement. It further refines the scope of preplanning focus. You can interview the auditee to inquire about activities or areas of concern that should be involved in the scope of the engagement. Try to identify some regulatory compliance requirements. After the subject, objective, and scope are defined, the audit team can finally identify the resources that will be required to perform the audit work.
Step 5: Establish Steps for Data Gathering
This is the last stage of the audit process in which the audit team should have enough information to determine and select the audit approach or strategy and also start developing the audit program. Some of the specific activities in this step include identifying and obtaining policies, guidelines for review, and standards. Identifying any regulatory compliance requirements and a list of individuals to interview are also included in these activities. You can also identify some methods including tools to conduct the evaluation and develop audit tools and methodology to test and verify controls, etc.
Results of Improved Audit Work Planning
It has been observed that emphasizing audit planning generally yields worthwhile results and improving such audit planning has been a great investment. Audit planning is referred to as the audit phase in which you can influence the audit results. It is considered to be a key but is too easily overlooked component of the audit process. This is something that needs to be emphasized and must be classified into a habit. And it is this habit that finally leads to audit success.
Advantages of the Audit Work Plan
- An audit work plan helps in ensuring whether all the important areas are considered while conducting the audit.
- It helps an auditor in the assignment of work among its team members based on their skills and competency.
- It also enhances the accountability of the audit team member towards their work performed by them.
- An audit work plan also helps in reducing the scope of misunderstanding among the team members regarding the performance of the audit work.
- This plan also helps the auditor in checking the status of audit work, its progress and how much it is left for performance while performing the audit.
- The auditor prepares audit working papers which may contain a record of various audit procedures that are applied. These procedures may serve as evidence against the charge of negligence.
- An audit work plan also enables the auditor to keep a record of useful information specifically for future audits and references.
Disadvantages of Audit Work Plan
- Rigidity: There are no such set standard audit plans that can be applied in the case of every entity. However, the plan may differ depending on the different types of entities. Every entity may have its problems and therefore, you cannot apply for a single audit work plan in the case of all the business entities.
- Decreases the Initiative of Effective Staff: The plan also decreases the initiatives of some competent and efficient or hardworking staff. Therefore, the staff members cannot even make changes in the audit work plan and cannot even make suggestions to it.
- Mechanical Change: The plan becomes mechanical when it avoids other aspects or characteristics like internal control.
- Missing the New Areas: An audit work plan might overlook the new areas. The plan may not consider or look through the new problems that may arise with the change in time and technology.