AUI3701 SEMESTER 1 AND 2 STUDY GUIDE

INTRODUCTION TO THIS MODULE: THE INTERNAL AUDIT PROCESS – PLANNING AN INTERNAL AUDIT Dwight D. Eisenhower once remarked: “In preparing for battle I have always found that plans are useless, but planning is indispensable.” For internal auditors, planning is so important that this whole module as well as a large part of AUI3704 has been devoted to its discussion. The International Standards for the Professional Practice of Internal Auditing (Standards) distinguishes between two major types of planning conducted by internal auditors. 1. INTERNAL AUDIT ACITVITY’S PLANNING Standard 2010–1 Planning: The chief audit executive must establish risk-based plans to determine the priorities of the internal audit activity, consistent with organisational goals. According to Standard 2010.A1, the internal audit activity’s plan of engagements (that results from the planning recommended in Standard 2010– 1) must be based on a documented risk assessment, undertaken at least annually, and the input of senior management and the board must be considered in this process. This type of planning therefore results in a plan of audit engagements which is based on a risk assessment of the whole organisation and which is approved by the board. 2. ENGAGEMENT PLANNING Standard 2200 Engagement Planning: Internal auditors must develop and document a plan for each engagement, including the engagement’s objectives, scope, timing and resource allocations. Thus, for each engagement planned according to Standard 2010–1, planning should be conducted according to Standard 2200. In this module we focus on the planning of the audit engagement, according to Standard 2200. Standard 2010–1 is discussed in Module AUI3704. THE ICONS OF ACTIVITIES USED IN YOUR STUDY MATERIAL Each learning unit contains various activities which you should perform. The study activities, for example, refer you to the study material in the study guide and tutorial letters which you are required to study; the doing and thinking activities require you to perform certain actions and to answer certain questions. AUI3701/1 (v) (vi) The icons that will be used in this study guide and tutorial letter are listed below, together with a description of what each of them means: Icon Description Key concepts. The Key concepts icon draws your attention to certain keywords or concepts that you will come across in the topic or learning unit. Learning outcomes. The Learning outcomes indicate which aspects of the particular topic or learning units you have to master and demonstrate that you have mastered them. Mind map. Mind maps are provided to help you to see the relationship between various parts of the learning material. Study. The Study icon indicates which sections of the prescribed book or the study guide you need to study and internalise. Read. The Read icon will direct you to read certain sections of the prescribed book for background information. Activity. The Activity icon refers to activities that you must do in order to develop a deeper understanding of the learning material. Reflection. The Reflection icon requires you to reflect on the important issues or problems dealt within the learning unit. Self-Assessment. When you see the Assessment icon you will be required to test your knowledge, understanding and application of the material you have just studied. Feedback. The Feedback icon indicates that you will receive feedback on your answers to the self-assessment activities. Multimedia. The Multimedia icon indicates that you have to refer to any audio, video, or DVD material that may be included in your study material. Time-out. The Time-out icon indicates that you should take a rest because you have reached the end of a learning unit or topic. Discussion. Use the discussion tool in this module to share valuable information related to assignments and topics that are related to this module etc. Make sure that you are in the correct discussion on myUnisa. Additional resources. You will find your assignments, additional documents, resources, PowerPoint presentations, and links to articles related to this module on myUnisa. Internet source. You will receive a link to access web content from an external website. STUDY OVERVIEW Icon Description Frequently asked questions. Q