## Audit Planning — Continuous and Iterative Nature
Audit planning is not a one-time event done before fieldwork. It is a continuous, iterative process that evolves as the auditor gains more understanding of the entity.
### Matters to Consider Before Risk Identification and Assessment
Before the auditor formally identifies and assesses the risks of material misstatement, planning requires considering:
| # | Matter | Purpose |
|---|---|---|
| 1 | Analytical procedures to be applied as risk assessment procedures | Identify unusual trends/relationships that signal risk |
| 2 | Obtaining general understanding of the legal and regulatory framework applicable and how the entity complies | Identify compliance risks |
| 3 | Determination of materiality | Set the threshold below which misstatements are acceptable |
| 4 | Involvement of experts | Identify areas requiring specialist knowledge |
| 5 | Performance of other risk assessment procedures | Round out the risk picture |
### Why 'Iterative'?
As audit work progresses, findings may require revisiting earlier planning decisions. For example:
- A control weakness discovered during fieldwork may increase materiality concerns → plan is updated.
- An expert's finding may reveal a new risk area → additional procedures added.
This iterative nature means the audit plan is a living document, not a static checklist.