Audit planning is the first step in establishing the basis of the nature, timing, and extent of the overall audit strategy to determine the validity of the financial statements. An efficient and effective audit plan provides for a thoroughly and properly planned audit (The Importance of Audit Planning). It helps to reduce audit risk to a low level. Audit planning ensures appropriate attention to critical areas and that potential problems

The most notable include: The inability to account for risks from customers with poor credit. The way sales are recorded with the income booked once the transaction is closed (versus when the income is received). Preparing for sudden shifts in the economy or from competitors. Substantive Tests The substantive test is when we are determining if the current strategy will be effective in addressing the risks facing the firm. This is accomplished through examining

Audit Quality and Agency Cost Since the advent of industrialization, there has been the presence of a bond between the people who invest and the people who manage those investments, forming a vital relationship amongst the two groups. Although with the rise of such relationships, the soaring issues of trust and confidence have been a hindrance in economic growth. Viewing the high percentage of the capital of investors or shareholders in

Audit Quality and Agency Theory Auditors have existed since the 1300's and for most of that time, their role remained the same. Auditors were the life-line of governments and businesses, helping establishments maximize profit and efficiency, the benefits of which were enjoyed by everyone. As time passed, auditors were given new roles and worked routinely to assure the maximum profit of the company that employed them. In the past 50 years, however,

3. The widening of the audit functions to include other elements outside employee hours, especially safety conditions within the workplace. 4. The decentralization of the control processes in the meaning of data collection and processing at the individual level of each of the three plants. This strategy would insure that the results are relevant and applicable in the context of the uniqueness of each plant. 5. The simplification of the control processes

Inadequate Records: The auditors found that the Commission did not have sufficient records about the evnt fees due from promoters. The lack of documentation prevented the verification of correct amount payable by certain promoters on account of broadcasting rights. To rectify the shortcoming, the report recommends establishment of procedure to ensure prompt deposit of contracts for broadcasting rights etc. Improper Use of Outside Bank Accounts The Commission improperly used its outside bank