Modern aspects of the general audit strategy

Authors: 

Moskal N. V.

Audit planning is a vital area of the audit primarily conducted at the beginning of audit
process to ensure that appropriate attention is devoted to important areas, potential problems
are promptly identified, work is completed expeditiously and is properly coordinated. Audit
planning means developing a general strategy and a detailed approach for the expected nature,
timing and extent of the audit. The auditor plans to perform the audit in an efficient and timely
manner. The auditor should develop and document a general strategy describing the expected
scope and conduct of the audit.
In developing the overall audit strategy we suggest to include: knowledge of the business;
general economic factors and industry conditions affecting the entity's business; important
characteristics of the entity, its business, its financial performance and its reporting requirements
including changes since the date of the prior audit; understanding the Accounting and Internal
Control Systems; the accounting policies adopted by the entity and changes in those policies; the
expected assessments of inherent and control risks and the identification of significant audit areas;
the setting of materiality levels for audit purposes; the identification of complex accounting areas
including those involving accounting estimates; possible change of emphasis on specific audit areas;
coordination, direction, supervision and review; other matters.
It is advisable to use the typical structure of the overall audit strategy for individual
audit firms. This will improve the process of forming the overall audit strategy and ensure
proper quality of future planning and auditing.