Planning the Audit Essay

2253 Words Apr 25th, 2016 10 Pages
Planning the Audit Process
I wanted to let you know that Apollo Shoes is satisfied with our services and wants to continue with a full audit. Therefore I wanted to explain to you how I plan to conduct the audit. I will begin with an explanation of the objectives, responsibilities and strategies for completing the audit. This will be followed by explanations on how analytical procedures will be used to plan, conduct and complete the audit, how materiality and risk will be consider in designing the audit and how technology will be incorporated into the audit.
The objective in conducting an audit are to obtain reasonable assurance about whether Apollo Shoe’s financial statements as a whole are free from material misstatement, whether due to
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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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