AUDIT PLAN

Audit Plan

Purpose of audit plan4

Scope of the work4

Internal control5

Assessment of risk6

Understanding the client's business and industry6

References11

Audit Plan

An audit is explained as the verification of business's financial statement. An audit is majorly done for the businesses with legal obligation to verify the business financials. Audit is done with opinions of auditor regarding the efficiency and accuracy of the business financials. The main purpose the audit is to independent verification of the financial statements which in result enhances the credibility of the organisations. It also increases the trust of the users of the financial statement and safeguards the risk of investors by providing clear picture of the business (Pickett, 2006, pp. 10-20).

An audit of the businesses poses importance as they regulate the collection of data and the process of evaluation of the business, and its efficiency. Audit provides the clear picture of the business to the stakeholders of the business. Audit also helps in detection of fraud and misstatement of the business and identifies the areas exposed to risks (Pickett, 2006, pp. 10-20).

Before auditing it is important for auditor to understand the business and industry in which business operates.

Battery supplies Ltd is basically company based on partnership among two persons Rose and Alan. The company was established 20 years ago. The company business is procurement of batteries and accessories of automobiles from UK based distributors and reselling those items on retail shops. The company has only one warehouse in Preston. All goods procured from suppliers are delivered first at the warehouse of the company. It is also mentionable here that majority of the company suppliers are based in UK, but the company increasingly purchases the goods from Italy due to cheap prices in Italy as production costs in Italy are relatively low as compared to UK. Therefore, company is purchasing more from Italy.

The majority of the customers of the company are located in UK. However, recently company expanded its business to the foreign customers also and it is done to increase the customers of the company globally. In UK, the deliveries are made to customers on company owned vehicles if possible as it is the cheaper way for company to handle and deliver heavy items as compared to third party logistics.

It is notable that majority of the battery industry procures from Asia and Italy and they make the product after the order which brings significant delay in the shipment of the product. Therefore, company can have advantage by procuring huge volumes and storing them and cater the customers when there is increase in demand.

Purpose of audit plan

The purpose of the audit plan is to provide information to the directors and staff of the Battery Supplies and ensures that there is no misstatement of the financials of the company and evaluates risks of the business (Puttick et al., 2008, pp. 227-235).

Scope of the work

The work carried by the audit committee will be provide the audit report according to the compliance with the audit code and ...