When a financial audit is planned, the first and most important step should be to define the audit objectives or what the audit finally intends to accomplish. The scope of the audit is always dependent on the objectives of the audit. The audit should be planned in a way that it should detect any fraud and illegal acts.
Familiarization of the auditor with form of accounts, scope of audit, different laws is most important. Matters from past year's audit should be also reviewed by the auditor to know the different issues and what problems are likely to occur in the current year. The effects of latest accounts, estimates, and budget on the audit should be considered too. One should also consider the changes during the past year and keep these in perspective for the audit. Such changes could be new head counts, account codes, automation and computerization, any new legislations etc. The auditor should gather enough evidence to support the opinions and conclusions that he/ she would be documenting. Hence, enough understanding of internal control methods is necessary for the auditor.
Familiarization of the auditor with form of accounts, scope of audit, different laws is most important. Matters from past year's audit should be also reviewed by the auditor to know the different issues and what problems are likely to occur in the current year. The effects of latest accounts, estimates, and budget on the audit should be considered too. One should also consider the changes during the past year and keep these in perspective for the audit. Such changes could be new head counts, account codes, automation and computerization, any new legislations etc. The auditor should gather enough evidence to support the opinions and conclusions that he/ she would be documenting. Hence, enough understanding of internal control methods is necessary for the auditor.
