Auditing, Ch. 4 Handout/ Fr. Louwers 4E

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General Planning Procedures 1: If new client:

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Complete and review the engagement acceptance form.

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General Planning Procedures 2: If continuing client

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a) reevaluate whether to continue auditing; b) determine whether there is any change in independ.; c) rev. matters in the EA form focusing on any changes in circumstances that could affect continuance

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General Planning Procedures 3: Review Correspondence files:

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prior year audit, workpapers, permanent files, financial statements and auditor's reports. Read any CY interim financial statements.

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General Planning Procedures 4: Determine the extent of involvement of other audit firms, consultants, specialists or internal auditors:

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a) inquire about any other audit firms about its independ. and professional reputation; b) if not principal firm, inquire about significant items to this audit; c) If internal auditors, determine, that it is used in accordance w/ the requirements of SAS NO.65

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General Planning Procedures 5: Obtain understandning of company, its IC, AR factors

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a) Hold discussions among engagement team members due to fraud, document discussion; b) complete audit planning form; c) make inquiries of mgmt. and other employees about the risks of fraud, document; d) consider existence of fraud; e) ID and assess risks of material misstatements; f) complete revenue internal control questionnaire and document understanding of revenue cycle; g) complete a test of controls for the revenue cycle

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General Planning Procedures 6: apply prelimnary analytical procedures by

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a) comparing acct. balances for the current period to similar amounts in piror period annual financial statements and b) performing analytical procedures to identify unusual or unexpected relationships that may indicate fraudulent financial reporting.

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General Planning Procedures 7: Discuss the type, scope and timing of the audit

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with the owner/manager, BOD or, if applicable, the audit committee. Discuss adequacy of working space for the audit team, access to client records, and assistance to be furnished by the client.

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General Planning Procedures 8: Obtain and egagement

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letter from the client

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General Planning Procedures 9: Complete the materiality

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worksheet for planning purposes

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General Planning Procedures 10: Prepare audit programs

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on significant area covered by the audit.

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General Planning Procedures 11: Complete a time

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budget by audit area.

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General Planning Procedures 12: Determine staffing

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assignments based on consideration of audit risks, and discuss the preliminary audit plan and key dates.

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General Planning Procedures 13: Obtain partner approval

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of audit work programs, staff assign., and time budgets.