Audit planning is one of the important and initial phases of conducting audits. This phase enables businesses to avoid and minimize audit risks, mistakes, and uncertainties. During this phase, a business prepares the baseline and outline for initiating the audits.

It is important to make the base of the audit stronger to catalyze the audit processes and improve audit efficiency. For ensuring such efficiencies, auditors prepare an audit plan before starting the actual processes. In this developed plan, 5 W’s define the reason, methods, and authorities of conducting the audits. Besides these 5 W’s, another factor is also a part of the audit plan, which we will study later.

Keep scrolling down the article to find the 5 W’s for conducting audits and their significance for an organization.

Top 5 Elements of Audit Planning Phase for An Organization

An organization must conduct the audit processes and procedures once a year or every month, depending upon why you want to conduct it. There are certain guidelines and standards that are a must to follow before conducting these reviews. One of the most important phases to execute is the audit planning phase which includes certain important elements.

Following are some of the most important elements and the 5W’s of the planning phase of organizational audits.

1.    Who?

One of the most important factors to discuss in the audit planning phase is who will be conducting the audit. You will either need an internal auditor or an external auditor depending upon the area that needs to be audited. The selection of the auditor is crucial because the truth and accuracy of the audit reports generated will depend upon the auditor. To avoid mistakes and complexities, many businesses hire the auditors of the top audit firms in Dubai and get the audits done accurately.

2.    What?

Whether you are auditing the financial records, quality of the products, or performance, you need to know it earlier. It must be clear that which areas need to be audited and what is the reason behind auditing these areas. You must also know what type of questions you need to ask from the people or the areas you are auditing. Knowing what to ask is important; there are certain restrictions and specifications made by businesses. These businesses may not allow the auditor to question everyone; the auditor may be given limited authority and reach.

3.    When?

Audits are usually conducted yearly in many organizations, but these audits may also be conducted monthly or quarterly. The answer to when to audit depends on the answer to what to audit. If you want to know what is happening wrong in your organization, then conducting the audits at the end of the year is not enough. It becomes crucial to conduct monthly or quarterly audits in such situations. It is usually recommended to conduct quarterly audits to identify the problems and their solutions as early as possible.

4.    Where?

When auditing your financial records, you must know from where to begin and where to end. An auditor must know about where are the areas that are bringing a change and imbalance in the reports generated by an internal auditor. Identifying “where the error” exists will help businesses deal with those areas and prevent future mistakes. You do not start auditing everything; you need to identify the areas where you feel the need for an audit. Knowing the answer to where will help you conduct your audits successfully and smoothly.

5.    Why?

Why you want to conduct audit practices in your organization will help you identify your audit goals. The answer to why will help you realize which areas are to be audited and which ones you do not have to audit. The most common reason for organizations to conduct audits is to identify the financial statements and reports developed are true and satisfactory. Audits help organizations know whether their business is performing well or not? Some audit firms also provide valuable advice on improving business operations and progress along with audit facilities.

What other than the 5 W’s?

Besides 5W’s in the audit planning phase, there is one H which stands for “How.” It will define the methods and guidelines of conducting the audits for an organization. Only the professionals and the experts know these methods of executing audits successfully and according to the give standards. The audits conducted must comply with the given standards in the UAE. You can hire the audit firms to conduct audits complying with the law and given audit standards to avoid complexities later.

Conduct audits at the right time through the right people!

Knowing when, where, and why to audit is important and knowing who will audit for your organization is even more important. Ensure that the people you are hiring to conduct audits are skilled and know their jobs. The reports generated and the conclusions made by these auditors will highly impact the decisions made by these organizations and their stakeholders.