'The audit process can be broadly grouped in three phases'. Prepare a note to substantiate the statement.

The audit process can be broadly grouped in three phases: Audit Planning, Execution of Audit and Reporting. Audit Planning: The audit plan, describes the processes and activities that are to be carried out in connection with a particular audit and for the improving the quality of audit. Accordingly, an auditor should plan an audit so that it is performed in an effective manner within the defined scope. The audit planning should also include overall audit strategy for the audit. The audit planning consist following actions: Understanding the company; Establishing audit objectives and scope; Determining materiality; Assessment of Risk; Preparation of Audit Plan and Preparation of detailed audit Programme. Execution of Audit: The effective Audit Execution is based on the Audit plan and the efficiency of the Audit team. However the Execution of the Audit covers the following actions: Sampling of various transactions or items Sampling for testing of controls Identification of events Performing controls testing procedures Performing analytical procedures Sampling for substantive test of details Performing substantive test of details Review of working papers Management discussion on draft report Reporting: In the reporting phase, the auditor covers evaluation of audit results, deriving conclusion, forming of opinion and prepare the audit report.