Audit planning: what it is, steps and how to do it



Planning before carrying out an internal or external audit is essential to ensure that all processes and details are carried out in the best possible way.

However, unfortunately, it is not uncommon to find companies that do not carry out this planning, and it was with this in mind that we decided to create today's article.

The lack of an audit plan can result in problems during the execution of tasks, in addition to lack of focus, lack of information and other details.

And we know that an audit done improperly can bring many problems to companies, and that's why it's so important to create an efficient audit plan.

Throughout this content, we will explain what audit planning is, how it works, what the planning steps are and how to carry it out in your institution.

Want to learn more about it? Read on.

What is audit planning and what are its purposes?

To ensure that the audit is carried out completely and efficiently, it is essential to determine what activities will be carried out prior to the audit itself.

The planning will start from the elaboration of an action plan so that the audit is properly carried out. In this plan, all the activities that will be carried out must be foreseen, organized in a timeline.

In addition, a scope with the processes, departments and products that will undergo the audit also needs to be done.

This will guide actions during the audit, allowing those responsible to focus on the really important points, without confusion.

To make the process even more efficient, it is important that the person responsible for the audit scores all the necessary documentation, such as quality procedures or policies, and creates a list of people who should be interviewed in the process.

Audit planning will therefore help to direct the activities that will be carried out by auditors, both in internal and external audits .

This is important to ensure that focus and efforts are in the right place throughout the entire process.

What is internal audit planning?

Internal audit planning consists of creating an action plan to perform an internal audit.

In the case of internal audits, company professionals will be in charge of carrying it out to verify certain issues such as information, stocks, processes, etc.

It is common for companies to establish specific days for the realization of each sector or product, making the process more efficient.

With the planning, the sectors, products and issues that will go through the audit will be raised, as well as those responsible for each action, the scope of the audit and all the details that will be audited.

What is external audit planning?

Like internal audit planning, external audit planning also consists of defining the entire scope, objectives and goals of the audit.

In this audit model, however, the auditor will be a third party, to bring a much more neutral analysis to the company.

Here, we can count on the support of a specialized professional, who will take the reins and evaluate the institution point by point.

In the external audit planning, the focuses and objectives of the activity will also be defined, as well as its scope, the timeline with the actions that need to be taken and the individuals who will be interviewed during the process.

Regardless of the audit process, whether it will be internal or external, the processes will be similar, and the steps are the same:

  • the definition of the objective and scope of that audit;
  • mapping and matrices;
  • the work program to be carried out.

The big difference is, therefore, the way in which the auditing process will take place: whether it will be done internally, by an internal professional of the company, or whether it will be done externally, by an outsourced professional.

What is the importance of audit planning?

Audit planning is key to organizing the process and keeping the right focus on the audit.

It is natural that, when carrying out an audit without planning, the focus ends up getting mixed up: it starts, for example, focused on a specific product or sector, and over time we end up getting involved in others, delaying and making some analyzes difficult.

With the objective well established, as well as the entire scope of work, it is possible that the professionals involved, whether in the internal audit or in the external audit, are able to carry out actions with greater productivity, focus and precision.

What are the objectives of the audit plan?

The audit plan has the following objectives:

  • enable the audit to be carried out efficiently and properly;
  • allow the auditor to achieve his objectives more easily;
  • allow greater control of the time spent during the audit;
  • increase control over audit development;
  • prevent work overload from occurring;
  • establish audit procedures.

If the audit is carried out without planning, it is common for the company to face some problems.

Are they:

  • forgetting some areas, products or sectors that needed to be analyzed;
  • take much longer to perform the audit;
  • having difficulty identifying significant problems that may be causing bottlenecks for the company;
  • act with unnecessary procedures, burdening the team;
  • not having a team available to carry out the audit.

Audit planning standards

NBC T 11 is the independent auditing standard for financial statements, and it is the standard used in audit planning.

It defines the processes, audit procedures, types of tests, relevant information and other details that need to be in an audit plan, as well as the best practices for carrying it out.

Understanding what NBC T 11 is, how it works and its particularities is essential to carry out audit planning.

See below.

NBC T 11

NBC T 11, as previously mentioned, is a set of auditing standards that are independent of financial statements.

According to this standard, audit procedures are defined, with a separation between compliance tests and substantive tests.

According to NBC T 11, the compliance tests are responsible for ensuring the safety that the procedures that are carried out internally are in accordance with the best practices.

In turn, substantive tests are necessary to obtain evidence regarding the accuracy, sufficiency and even the validity of the data that are raised by accounting.

This substantive test is divided into:

  • transaction and balance tests;
  • analytical review procedures.

NBC T 11 and audit planning

According to NBC T 11 , audit planning will need to consider all factors that are, in fact, relevant for the work to be well performed.

These factors include:

  • detailed knowledge of the company's accounting system;
  • the company's internal controls, as well as their degree of reliability;
  • knowledge of the accounting practices adopted by the company;
  • the changes that may happen in relation to the previous accounting period;
  • associated entities and subsidiaries, when applicable;
  • all audit risks;
  • the important areas of the company, as well as its volume of transactions or levels of complexity of activities;
  • independent, internal or specialist auditors who have already worked at the institution;
  • the audit procedures that will be applied with detailed information such as their nature, extent and opportunities;
  • other reports and reports that must be delivered to the company, with detailed information such as their nature, opportunities and contents;
  • finally, it is also considered mandatory to declare the deadlines established by the regulatory or supervisory entities for the information to be provided to the other parties involved.

How is audit planning done?

Audit planning starts with creating an annual audit plan .

In this annual plan, the following topics should be addressed:

  • the forecast time for the execution of each of the tasks defined in the annual plan;
  • the areas that will be examined by the auditors;
  • what are the priorities;
  • audit programs that will have a rotational focus;
  • the scope of the audit in certain areas;
  • the organization units;
  • responsible for audits throughout the year.

What are the steps in audit planning?

The audit planning has three established steps:

  • the definition of the objective and scope of that audit;
  • mapping and matrices;
  • the work program to be carried out.

1. Definition of objective and scope

For all actions carried out within a company, it is essential to keep in mind the objective and scope to be followed – and in the case of audit planning it is no different.

The first step in creating your audit plan is to establish what the audit objective is and what the scope will be.

Define here, too, if it is an internal or external audit, what are the next steps and those responsible for them.

The scope will need to define which processes, departments and products are to be audited. This will help keep the team focused on the analysis points.

2. Mapping and matrices

Mapping and matrices consists of the step of drawing a timeline, mapping all the actions that should be performed by the auditor.

In addition, the person responsible for the audit will score all the documents necessary to carry out the audit, such as internal policies and quality procedures.

At this time, it is also necessary to separate who will be interviewed during the audit.

The tip is to create a list with the names and contacts of each of the interviewees.

3. The work program

Finally, it is necessary to establish the work program, where the auditor will have in hand the forecast for the start of the audit and all the step by step to start the execution itself.

What defines a good audit plan?

A good audit plan is one that follows the best practices defined by NBC T 11 , which is very detailed and capable of providing maximum guidance to those responsible for carrying out the activities.

At this moment of creation of the audit plan, the more detailed, the better the guidance for the auditors, who will know exactly the focus and the step by step to proceed with their work.

What are the main points that we should observe when preparing an audit plan?

In order to develop a really efficient audit plan, it is necessary to consider the three fundamental steps of this process:

  • the definition of the objective and scope of that audit;
  • mapping and matrices;
  • the work program to be carried out.

According to NBC T 11, audit planning requires that there be:

  • an adequate level of knowledge about the activities carried out;
  • economic factors;
  • the legislation applicable to the company being audited;
  • the company's operating practices;
  • the level of competence of the institution's management.

What are audit procedures?

NBC T 11 defines the following as basic technical procedures in an audit:

  • inspection, which consists of examining the company's records, documents and tangible assets ;
  • observation, which works as a follow-up to the process or procedure during its execution;
  • investigation and confirmation, which is the process of obtaining information together with other people or entities that know about the transaction, inside or outside the company;
  • the calculation, which functions as a conference of the supporting documents that were presented, in addition to the records and financial statements . Other documents may also be considered, according to purpose and need;
  • and the analytical review, where the behaviors of the company's significant values ​​are verified, in view of the quotients, indices, absolute quantities and other variables, always considering the atypical situation or trends during the moment being analyzed.

 

Post a Comment

0 Comments