## Development of the Audit Plan

### Relationship Between Strategy and Plan

Audit Strategy	Audit Plan
Sets broad overall approach	Addresses specific matters from the strategy
Determines scope, timing, direction	Describes how the strategy will be implemented
Less detailed	More detailed than the strategy

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### What Must the Audit Plan Include?

SA 300 requires the auditor to develop an audit plan that includes a description of:

1. Nature, timing and extent of planned Risk Assessment Procedures (RAP)

2. Nature, timing and extent of planned Further Audit Procedures at the assertion level

Tests of controls
Substantive procedures

3. Other planned audit procedures required to ensure the engagement complies with SAs

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### Key Point: Planning is Iterative

Planning for audit procedures takes place over the course of the audit — it is not done once and locked in. As the auditor gathers evidence, the plan evolves.

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### Responsibility for Planning

> The responsibility for establishing the overall audit strategy and planning lies with the auditor (engagement partner) — it cannot be delegated entirely to team members.

Worked example

### Example 1

Example — Audit Plan Content:

For the audit of DEF Retail Ltd, the audit plan for the 'Revenue' assertion area might specify:

RAP: Analytical procedures comparing monthly sales to prior year and budget (timing: before fieldwork)
Further procedures: Test controls over the POS system (test of controls); confirm 30 large debtors (substantive — timing: year-end)
Other: Review management's going concern assessment per SA 570 requirement

### Example 2

Example — Plan vs Strategy:

The audit strategy for PQR Bank says: 'Focus on loan provisioning and NPA classification — high-risk area.' The audit plan then specifies exactly: review of 50 individual loan files above ₹1 crore, recalculation of provisioning using RBI norms, inquiry of credit committee members. The plan converts the strategic direction into specific procedures.

⚠️ Common exam mistakes

Writing an audit plan that is identical to the audit strategy — the plan must be more detailed and operationally specific.
Omitting 'other planned audit procedures required to comply with SAs' from the plan description — for example, SA 570 going concern procedures are mandatory regardless of risk assessment.
Treating the audit plan as a one-time document; it must be updated as the audit progresses and evidence differs from expectations.

Reference: SA 300, Development of Audit Plan — SA 300 — Planning an Audit of Financial Statements (ICAI)

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Developing the Detailed Audit Plan

Worked example

⚠️ Common exam mistakes