Audit Planning and Risk Assessment

When planning a risk assessment, the more information you can gather from the service user, their family or any other organisation that has dealings with the service user will help to complete a more person-centred assessment and minimise the risks and help to prove a better service.

Knowledge about risks related to the company evaluated as part of the auditor 's client acceptance and retention evaluation; and the relative complexity of the company 's operations. ( Auditing Standard No. 9 //. (n.d.).

Moreover, the auditor should preform test for effectiveness of internal controls. He may interview management by asking questions on the process of the transactions and operational activities. He may discuss with management the process of some transactions from beginning to end and then test it by using sample testing. Also he/she should make sure that there is proper control of activities; policies and procedures for adequate segregation of duties are met.

How management identifies those transactions, events and conditions that may give rise to the need for accounting estimates to be recognized or disclosed in the financial statements. And the auditor shall make inquiries of management regarding changes in circumstances that may give risk or new or the need to revise existing, accounting

3 Before deciding the reporting lines for internal audit, it is critical to consider the fundamental distinction between the respective roles of the board (oversight) and management (decision making and the execution of those decisions). Key activities which fall within the definition of effective oversight include listening, asking questions, assessing and challenging answers. In many respects this is exactly what an effective internal audit function does.

The auditor’s responsibility is not to evaluate a client’s business model but to have a sufficient understanding of the entity. An auditor needs a sound and comprehensive understanding of the client’s business and industry to develop valid expectations about financial-statement assertions.

Before commencing an audit, the new auditor would determine the extent and scope of activities involved in the planning process. This would depend on the complexity and size of the organization (CVS), how much experience the auditor has with the company, and any new events that may occur causing changes to the audit. During audit planning and strategy making, the new auditor should assess if the issues below are crucial to internal control and financial reports of the company being audited. If they are, the auditor should indicate their effect on the audit

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances.

(ii) Develop a comprehensive internal audit program or plan. The program should include the purpose, scope, assignment of personnel, sampling, control and duration as well as establish appropriate audit processes, policies and operating procedures IFI;

Auditors job is to watch employees and make sure they following agreed upon procedure of company

to assess the stewardship or accountability of management. to assess the ability of the entity to pay and provide other benefits to its employees. to assess the security for amounts lent to the entity. to determine taxation policies. to determine distributable profits and dividends. to prepare and use national income statistics. to regulate the activities of entities.

Auditors must also acquire an understanding of the general controls that contribute to the proper functioning of the client’s information system. Any malfunctioning of these controls can cause issues with the processing of information for financial reporting purposes, an example of this are certain issues with the security controls that maintain proper segregation of duties.

a) To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

Firstly, setting up the audit objectives and scope, preparing relevant documentation, deciding time period for the audit.

International standard of auditing require obtaining sufficient knowledge regarding the key areas of the business.