As a part of the planning process, auditors develop an audit strategy, an audit plan, and a time budget.a. Describe an audit strategy and explain its purpose.b. Describe an audit plan and explain its purpose.c. Describe a time budget and explain its purpose.

Question

What will be an ideal response?

Answer 1

a. The overall audit strategy involves determining the characteristics of the engagement that define its scope, determining the engagement's reporting objectives to plan the timing of procedures, and considering important factors that will determine the focus of the audit team's efforts.

b. The audit plan is a written or electronic document that includes the nature, timing, and extent of audit procedures to be performed by the audit team members in order to obtain sufficient audit evidence. It includes planned risk assessment procedures, planned further audit procedures, and other necessary audit procedures. It is also used as a tool for scheduling and controlling the work.

c. The time budget includes an estimate of the time required for each audit task. It serves as a basis for the fee estimate, controls the audit work, and may be used to evaluate performance by the audit staff.