Audit Planning Memo
Date: January 7, 2019
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There is some confusion on how to structure your audit planning memos. Here’s what I use to remember the major components – RAMP

Risk, Approach, Materiality, Procedures


Here you will discuss the risk factors that affect the risk at the FS level. Don’t forget to include inherent and control risk factors if applicable. Discuss factors that increase AND decrease risk to provide balance. Finally, you will conclude on whether risk is high, moderate or low.


Your control environment directly impacts your approach. If you have a high amount of control issues, you will adopt a primarily substantive approach. And if you don’t have a weak I/C environment, then you will use a combined approach. Here you will need to make a link with both. So make sure that you use case facts to support your stance.


Your materiality relates to the users. Make sure you do not link this with your risk assessment. If you have many users relying on the FS, then your materiality level will be affected accordingly.
Here you will also discuss performance materiality. This is especially important because you need to demonstrate that you have a good understanding of CAS 320.

Discuss the reason why you have selected a specific basis of materiality.

Quantify if possible based on your adjusted FS.


Your procedures are typically linked with your financial reporting issues. Some prefer to include procedures directly below the financial reporting issues instead of including it after the materiality discussion. This makes sense given that you are linking both. Do not forget to discuss and integrate the applicable assertions when discussing procedures.

Lecturer, teacher, coach and called the CFE Guru. Narmin has been helping candidates successfully complete their professional exams since 2006.


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