Acca aaa s21 Notes

2.1. Reasons why planning is important
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If you don’t plan it you won’t carry out the audit effectively. You would not know something as 
obvious as when the year end is, or how many branches or factories a company has, or how 
many staff members you may need to conduct the audit, or whether the company has a lot of 
valuable inventory.
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You have to think both of a general strategy and a detailed approach. For example, in some very 
large companies auditors do not visit all the branches every year. They may visit only a quarter 
of the branches one year, another quarter the next year and so on. They have to decide whether 
or not to attend a physical inventory count. They may have to decide whether or not opinions 
from other experts are required. For example, on the adequacy of the company’s pension 
scheme.
2.2. Objectives of adequate planning
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To give appropriate attention to important areas. Is there a high inventory? Is there a high 
volume of cash transactions? Are trade receivables particularly significant? Important areas will 
certainly be material areas, and materiality is discussed below.
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To identify potential problems. For example, if the company has recently changed its 
computerised accounting system there may well have been problems at the switch-over time, 
and staff may still be inexperienced.
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To carry out the work expeditiously. That really means reasonably quickly and efficiently.
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To ensure that the right numbers of staff are in the audit team with the right skills. They have to 
be timetabled so that the work for this client and other clients can be accommodated.
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To coordinate, if necessary, with other parties. For example, the internal audit department of the 
company.
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To facilitate the direction and supervision of the audit team and the review of their work.