Audit planning is a critical phase in the auditing process, where potential risks must be identified and addressed to ensure the accuracy and reliability of the audit results. One significant risk involves the misidentification of key areas that require scrutiny, which can lead to an incomplete or ineffective audit. This risk is heightened in complex organizations where transactions are numerous and financial systems are intricate. Another risk is the possibility of underestimating the required resources, such as time and skilled personnel, which can result in rushed audits and potentially overlooked discrepancies.

Recommendations for mitigating these risks involve companies implementing a thorough risk assessment process as part of audit planning. This involves identifying areas with high risks of material misstatement due to errors or fraud. Auditors should use both quantitative methods, such as trend analysis and ratio analysis, and qualitative assessments, such as interviews with key personnel, to gain a comprehensive understanding of the business environment and its inherent risks. Additionally, auditors should ensure that they have access to all necessary information and resources, planning adequately to cover all critical areas comprehensively.

Furthermore, continuous training and development of the audit team are crucial in enhancing their ability to identify and address potential risks effectively. Keeping abreast of the latest auditing standards, technologies and methodologies can equip auditors with the tools needed to conduct thorough and effective audits. Furthermore, fostering a culture of open communication within the audit team and with the company's management can facilitate the timely sharing of information that may affect the audit process. By adopting these strategies, companies can significantly reduce the risks associated with audit planning and increase the likelihood of conducting successful and reliable audits.

1. Audit Planning and Scoping Checklist

Plan the nature, timing and extent of work on an individual audit assignment where the design effectiveness and/or operational effectiveness of any business process are to be examined with our checklist. It can be used in connection with the planning and scoping memorandum template to prepare detailed instructions for the work. The project manager can leverage this checklist to assign responsibility for certain steps to the person who will be in charge of the field work.

2. Audit Planning Memo

This tool provides three sample planning memos, which serve as a report of an internal audit function’s high-level assessment of the company’s audit planning process and outline what should be included in an audit planning memorandum. The audit planning memo can be used for reviewing the effectiveness of the function and confirming that the scope and direction of the group are aligned with industry best practices. In these memos, internal audit evaluated the effectiveness of any existing controls that, based on sample testing, have consistently been in operation during the audit sample period.

3. Procurement Card Internal Audit Planning Memo

This sample procurement card internal audit planning memorandum documents the audit approach and scope. The purpose of the audit is to assess the adequacy of internal controls, the level of compliance with established policies and procedures, and the effectiveness and efficiency of business operation. This memorandum should be completed as part of the initial audit planning process and is meant to enhance audit efficiency. This document can be used as a general guide to understand and review the procurement card memorandum. 

4. Audit Administration Project Questionnaire: Audit Planning, Fieldwork, Reporting and Wrap Up

This sample questionnaire can be used to assist a project team with ensuring that the administrative elements of an audit project are completed in accordance with company requirements. These administrative elements primarily focus on audit planning, fieldwork, reporting and wrap up. While using this questionnaire, the audit team may decide to add additional columns or items, depending on the specific project or auditee requirements.

5. Remote Locations Audit Planning Memo

This memo documents a university's approach for planning a remote location audit. It lists the remote location project needs, proposed remote location sample, proposed scope for leased location audits and the estimated effort. In this sample, the university has requested remote location audits be performed on a judgmental sample of locations, the objectives are to determine compliance with select university policies and procedures, determine whether key financial controls exist and are operating effectively, and determine whether reasonable security protocols are being followed. 

6. Internal Audit Plan Status – Report to the Audit Committee

Document updates on the internal audit plan status and its implications for the audit committee's decision-making process. This document is primarily used to communicate with the audit committee about the status of various audits and projects scheduled throughout the fiscal year. It details the execution stages of ongoing audits, including scope, fieldwork progress and reporting phases, as well as outlines the results and recommendations from audits completed within the quarter.

7. Bank Audit Plan Report

Our Bank Audit Plan Report includes a thorough risk assessment and gap analysis, developed using a risk-based audit approach for effective auditing. By utilizing a risk-based audit approach, organizations can identify key auditable areas, assess each for potential risks, and assign a risk rating, ensuring that high-risk areas are prioritized and audited annually, while medium to low-risk areas follow an 18-to-24-month cycle. The report includes a summary audit plan, highlighting budgeted hours for each area, and a Focus of Audit Effort section, which compares the distribution of efforts across various departments over current and prior years.

8. Annual Internal Audit Plan Report

Get three sample audit reports that outline the approach employed by internal audit to develop an audit plan for core audits and hot spots. In these samples, core foundational audits are conducted each year that focus on key risk areas, processes, and SEC and other regulatory requirements. Hot spot audits are top-of-mind audits that directly relate to risk areas impacting company business. These hot topic/top-of-mind audits address key risk areas and ongoing initiatives are consistently referenced during risk assessment sessions and risk council meetings and/or identified during prior-year audits.

9. Sales Planning and Forecasting Process Appraisal Questionnaire

This questionnaire sample includes questions that can be addressed when evaluating an organization's sales planning and forecasting processes. Questions include: Is there a documented sales planning/forecasting process supported by related policies? Is the company business plan used to drive the sales plan and forecast, and are these plans routinely compared for consistency? Are the sales planning/forecasting process activities defined in conjunction with a calendar of activities, events, meetings, and so on? 

10. Internal Audit Leadership Transition Plan Report

Outline an event-based timeline, a proposed interim delivery team structure, and roles and costs associated with an internal audit leadership transition with our report. The new internal audit function will report functionally to the audit committee and administratively to an identified executive within the organization. In this sample, the company must transition and restore the internal audit function to replace professionals who have moved to other responsibilities in the company.

Browse our Audit Planning topic page to see all of the audit planning tools and publications we have published.