Audit strategy generally means the combination of audit approach to be used, resources management and allocation, timing of the audit and the way how the audit engagement is managed. For example, the auditor will use risks based audit approach or top-down approach to conduct audit assignment.
In establishing the overall audit strategy, the auditor shall consider the following key factors:
- Identify the characteristics of the engagement that define its scope.
- Ascertain the reporting objectives of the engagement to plan the timing of the audit and the nature of the communication required.
- Consider the factors that in the auditor’s professional judgement, are significant in directing the engagement team effort;
- consider the results of preliminary engagement activities and, where applicable, the knowledge gained on other audit engagement performed by the engagement partner for entity is relevant; and
- ascertain the nature, timing and extent of resources necessary to perform the engagement.