The Auditor shall plan the audit with professional scepticism so that it is possible to exercise professional judgment in an objective manner. The application of professional scepticism enhances the effectiveness of appl

Developing the Audit Plan Yes, the statement is correct as the Auditor establishes the overall audit strategy, which sets out the scope, timing and direction of the audit and guides the development of the more detailed audit plan which should include the following: Introduction - a short introduction about the audit; Audit field - A description of the audit field, including the regulatory framework for the audit where relevant and recent significant changes and developments that may affect the audit; Audit objectives - The audit objectives depend on the type of audit to be conducted; Audit coverage - The audit coverage periods to be covered and locations to be visited; control systems to be tested and sample to be audited; Materiality - Identification of materiality in terms of value, nature and context; Risks - A preliminary assessment of risks (e.g. changes in the regulatory environment or internal control systems and evaluation of inherent and control risk); Audit approach - The audit approach, including the audit procedures to be carried out in order to provide the necessary audit evidence. This identifies the extent of planned reliance on control systems and the extent of substantive procedures; Organisation - Organisation of audit work: resources (including recourse to the work of other Auditor and experts), timetable (including the reporting objectives of the audit), documentation in electronic audit support system. The Auditor shall adhere to the audit plan. The audit plan may be modified, if circumstances so warrant. The audit plan should be documented in audit file, including significant changes made during the course of the audit and the reasons for such changes. The audit plan should be updated and modified as may be necessary during the course of the audit, whether due to unexpected events, changes in conditions or audit evidence obtained. This may have an impact on the planned nature, extent and timing of planned audit procedures. Updation of audit plan may be carried out in the circumstances such as change in business plan, changes in the regulatory environment, changes in management, etc.