Planning the Audit Essay

2253 Words Jan 18th, 2016 9 Pages
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Essay Sample: Page 2
After the relevant assertions have been identified, we will then develop audit objectives for each category of assertions. These objectives will follow and be closely related to their management’s assertions about the financial statements, and it is our primary responsibility to determine that these assertions are justified. The reason for using audit objectives, rather than the assertions, is to provide a framework to help us accumulate sufficient and appropriate evidence. (Arens, J., & & Beasley, 2014)

In planning the audit, analytical procedures will serve as an attention-directing device. The objective of using analytical procedures is to increase our understanding of Apollo Shoes and identify specific audit risks by considering unusual or unexpected balances or relationships in the data. The analytical procedures we can use in planning the audit might include account balance comparison, ratio analysis and regression analysis. (Arens, J., & & Beasley, 2014)

In considering materiality in planning this audit we will first determine materiality for the financial statements as a whole and then for performance materiality, which is materiality for segments of the audit. In determining materiality for the financial statements as a whole, we are required to decide on the combined amount of misstatements in the financial statements we consider material early in the audit as we develop the overall audit strategy,
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