Free ACCA FAU Audit Planning and Risk Assessment Study Guide

Overview

This module covers audit planning and risk assessment procedures, including audit risk components, materiality calculation, and audit strategy development. Topics include risk-based approach, analytical procedures, and audit documentation requirements.

1. Audit risk

• Definition including inherent, control and detection risk
• Risk-based approach to audit
• Materiality concept and calculation

2. Understanding the entity and environment

• Obtaining initial understanding of entity and framework

3. Audit strategy and plan

• Need for audit planning
• Contents of overall strategy and plan
• Analytical procedures in planning
• General planning issues including resources and IT
• Role, advantages and disadvantages of audit programmes

4. Audit documentation

• Reasons for maintaining documentation
• Purpose and contents of current and permanent files
• Quality management for review of working papers
• Use of IT in documentation