Meaning of Audit Planning
Auditing simply refers to the evaluation of business books of accounts & vouchers. It is done to make sure whether all the financial transactions are accurately recorded. Auditing aims at finding out the errors from books of accounts of the business.
Audit planning is a process of making strategy and planning how the auditing will be done by the auditors. A good audit planning will help the auditor to minimize its risks, improve audit efficiency, and meet its objective at the minimum effort.
Objectives of Audit Planning
- To minimise risk, Audit helps the business to identify the risk and help business to decrease the risk. When the auditor plans the audit, he makes sure every aspect of the audit.
- To check Assets and liabilities, Auditing thoroughly evaluates the financial statements of the business. It helps in confirming the true value of assets & liabilities of the organisation.
- Error and Fraud detection, Auditing planning helps the business to find the errors and fraud of the accounting. Sometimes, employees do errors intentionally and unintentionally. So, audit planning makes sure the errors and fraud should be detected during an audit.
- Creates faith to Investors, Auditing assures that each & every figure represented in the financial statement is correct. It creates faith among the investors and helps the company to bring investments.