1. S8: Audit Planning Memorandum

2. Audit Planning Memorandum
Audit Planning Memorandum is prepared
To set out the objectives of the audit
To spell out how the auditor aims to achieve these objectives
It is also a tool to
monitor the progress of the audit and
promotes high quality and professional audit work.

3. Elements of audit planning memorandum
Background
information about the audited entity;
Materiality
the overall materiality level the auditor chose and
any exceptions, e.g.if the auditor has chosen a separate, lower materiality level for certain figures;
Risk assessment
the auditor’s assessment of risks, taking into account their opinion of the control environment together with the controls in place for each of the areas being reviewed;

4. Elements of audit planning memorandum
Audit objectives
General Objectives - set out the relevant constitutional and legal provisions
Main Objectives - this will be the accuracy of the financial statements and the legality and regularity of the underlying transactions
Specific Objectives - any audit work in addition to the main objective. For example, to investigate an area of special interest or to follow up a recommendation from a previous year

5. Elements of audit planning memorandum
Audit approach
summarising the testing to be undertaken,
the extent of substantive testing
the extent to which the auditor intends to use analytical procedures, if at all.
If yes, the auditor would set out the account figure they plan to test in this way, and how they will make the forecast. . For instance, for testing salaries, the auditor may use personnel records and salary rates to make a forecast and would therefore note the sources of information they aim to use.

6. Elements of audit planning memorandum
Resources and timing
the date of starting and completing the audit
the number of days the audit team would spend at the offices of the entity
responsibilities and tasks allotted to the team members
and dates of discussion with the auditee and to take into account the comments furnished by them
the dates of finalisation of report.

7. Elements of audit planning memorandum
Key contacts at the entity
listing one or more important persons within the audited entity, including names, department, postal address, telephone number, and address

8. Case study