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Audit Planning Memorandum

Audit Planning Memorandum :

The auditor should summarise his audit plan by preparing an audit planning memorandum in order to:
 Describe the expected scope and extent of the audit procedures to be performed.
 Highlight all significant issues and risks identified during his planning and risk assessment activities, as well as decisions of reliance on controls.
 Provide evidence that they have planned the audit engagement appropriately and have responded to engagement risk, pervasive risks, specific risks, and other matters affecting the audit engagement.
The audit planning memorandum should be approved by the audit engagement partner. It ordinarily addresses the following matters:
 Assessment of and planned responses to the engagement risk, pervasive risks or specific risk at the assertion level for classes of transactions,
account balances, and disclosures.
 Assessment of the initial conclusions in respect to the independence and potential conflict of interest.
 Other significant issues arising out of the planning activities, which may include the following:
o Identified fraud risk factors;
o Preliminary conclusions regarding the components of internal control;
o Audit materiality;
o IT environment of the bank and need to use the work of an expert; and
o Changes in the bank’s environment such as, changes in accounting policies or accounting process of the bank.

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