1. Learning Objectives LO1 Outline six general audit techniques for gathering evidence. LO2 Identify the procedures and sources of information auditors can use to obtain evidence for understanding an auditee’s business and industry, assessing risk, and responding to assessed risk. LO3 Explain audit evidence in terms of its Appropriateness LO4 Describe the content and purpose of the audit plan as well as the specific audit programs and detailed procedures it contains. LO5 Evaluate audit working paper documentation for proper form and content. 1

2. Audit Plan and Detailed Programs Audit planning is an on-going process  Planning is done at the start of the audit.  Planning continues as new information results in revisions to the plan. LO4 2

3. The Planning Document The planning memorandum is a summarization of the preliminary analytical review and the materiality and risk assessment with specific directions about the effect on the audit. LO4 3

4. The Planning Document All planning becomes the basis for the audit program.  The audit program specifies procedures the auditor will use to guide the work of inherent control and control risk assessment and to obtain sufficient competent evidence as a basis for the audit report. LO4 4

5. Audit Programs Audit programs set out the nature, timing and extent of the planned audit procedures.  Nature – which general types of evidence will be used.  Timing – when procedures will be performed, at interim dates or at year-end.  Extent – size of samples to be used. LO4 5

6. Types of Audit Programs Auditors use two general types of audit programs:  Internal control program:  A specification of procedures for obtaining and understanding the client’s business and control systems (assess IR and CR).  Balance-audit program:  A specification of substantive procedures for gathering direct evidence on assertions about dollar amounts and accounts. LO4 6