Compliance Management, Audit and Due Diligence · Audit Principles and Techniques

Audit Planning, Strategy and Programme Explained

Updated 11 October 2026 · Fact-checked

Audit planning means deciding in advance how the audit will be done. The auditor sets an overall audit strategy (scope, timing, direction) and then a detailed audit programme (specific procedures). Working papers record the work and evidence. To answer questions, define each term, show how they link, and apply them to the facts.

Understand Audit Planning, Strategy and Programme

An audit is a large exercise with limited time and cost. If the auditor starts without a plan, effort goes to the wrong areas and risky areas get missed. Planning solves this. In the words of SA 200, the auditor must plan the audit so that it is performed in an effective manner, and direct audit effort to areas most expected to contain risks of material misstatement, whether due to fraud or error, with correspondingly less effort elsewhere.

Planning has two levels. The overall audit strategy is the big picture. It covers the scope of the engagement, the timing and reporting objectives, the important factors that direct the team's effort, the nature of the client's business, and the resources needed. The audit plan (detailed plan) comes from the strategy. It describes the nature, timing and extent of the risk assessment procedures and of the further audit procedures to be done.

The audit programme is the list of detailed procedures for each area, such as purchases, sales, payroll or fixed assets. It says what to do, who will do it, when, and how much to test. Think of the strategy as the route map, the plan as the schedule, and the programme as the daily to-do list. Many textbooks treat the audit plan and audit programme almost together, but the programme is the more detailed, procedure-level document. Note that the plan is not fixed. If risks change or new facts appear, the auditor updates the strategy, plan and programme.

Audit working papers are the records of the planning, the procedures performed, the evidence obtained and the conclusions reached. Under SA 200, documentation must be sufficient to enable an experienced auditor, having no previous connection with the audit, to understand the significant professional judgments made on significant matters. Working papers support the audit report, help supervision and review, and are evidence that the audit was done as per the standards.

Two mindsets run through all of this. The auditor must plan and perform the audit with professional skepticism, recognising that circumstances may exist that cause the financial statements to be materially misstated. The auditor must also exercise professional judgment. But judgment is not a justification for decisions that the facts and the audit evidence do not support.

Key rules to remember

Purpose of planning (SA 200): Plan effectively + focus effort on high-risk areas + test populations; These are the three things the auditor must do, as listed in SA 200 guidance on the nature of audit procedures.
Hierarchy of planning documents: Overall audit strategy → Audit plan → Audit programme; Strategy sets scope, timing and direction. Plan sets nature, timing, extent of procedures. Programme lists the actual steps.
Content of an audit plan: Plan = nature + timing + extent of procedures; Use this phrase whenever asked what an audit plan contains.
Risk assessment link: Assessed risks of material misstatement → nature, timing, extent of further audit procedures; Per SA 200, risks are assessed at assertion level to decide what further procedures give sufficient appropriate evidence.
Detection risk: Detection risk can be reduced, not eliminated; Because of inherent limitations of an audit, some detection risk always remains.
Working papers test: Documentation must let an experienced auditor with no prior connection understand significant judgments; This is the standard of sufficiency for documentation under SA 200 guidance.

How to solve Audit Planning, Strategy and Programme questions

Use this order for any theory or case question on audit planning, strategy, programme or working papers.

1Identify what is asked: planning in general, strategy versus programme, programme preparation, or working papers.
2Define the key term in one or two lines, using the standard's language where you remember it.
3State the purpose: effective audit, focus on risky areas, reduced audit risk to an acceptable level.
4List the contents or steps in a clear order, using points under each heading.
5Link the document to the next level, for example strategy to plan to programme, or risk assessment to further procedures.
6Apply the facts in a case question: name the risk area, the procedure, the timing and the working paper that records it.
7Add a line on updating the plan, professional skepticism and documentation, then conclude.

Quickest way: S-P-P-W frame

When to use it: Use when you have under ten minutes for a 5 to 8 mark question and need a safe, complete structure.

S: Strategy. Say it sets scope, timing, direction and resources.
P: Plan. Say it details the nature, timing and extent of procedures.
P: Programme. Say it lists the step-by-step procedures by area, with who, when and how much.
W: Working papers. Say they record the work, evidence and conclusions, and support the report.
Close with one line: plan is revised as the audit progresses, and judgment must be backed by evidence.

Common mistakes in Audit Planning, Strategy and Programme

Treating the audit strategy, audit plan and audit programme as the same thing.
Textbooks use the words loosely, and all three are about planning.
Fix: Give each a one-line distinction: strategy is broad direction, plan is nature, timing and extent, programme is detailed procedures.
Saying the audit plan is fixed once approved.
Students think of a plan as a rigid document.
Fix: State that the strategy, plan and programme are updated when risks, client circumstances or evidence change.
Writing about working papers only as a file of papers.
The term sounds like simple record keeping.
Fix: Explain their purposes: support the report, aid supervision and review, evidence compliance, and let an experienced auditor understand significant judgments.
Claiming the auditor can reduce audit risk to zero by planning well.
Students overstate the benefit of planning.
Fix: Say risk is reduced to an acceptably low level. Detection risk can be reduced but never eliminated.
Giving a generic programme with no link to risk.
Students memorise lists of procedures.
Fix: Tie each procedure to an assessed risk or assertion, and vary nature, timing and extent accordingly.
Using professional judgment as a reason to skip evidence.
Judgment is seen as freedom to decide.
Fix: State that judgment must be supported by the facts and sufficient appropriate audit evidence, and documented.

Worked examples

Example 1

Distinguish between an audit plan and an audit programme. (5 marks)

Show the solution

Define the audit plan: it flows from the overall audit strategy and describes the nature, timing and extent of risk assessment and further audit procedures.
Define the audit programme: it is a detailed list of procedures for each area of the audit, stating what to do, who does it, when, and how much to test.
Compare scope: the plan is broader and covers the whole engagement; the programme is narrower and works area by area.
Compare use: the plan guides the engagement partner and team overall; the programme guides staff doing day-to-day work and is signed off as steps are completed.
Compare change: both are revised during the audit as risks and evidence change.

Answer: The audit plan sets out the nature, timing and extent of procedures for the whole audit, following the overall strategy. The audit programme is the detailed, step-by-step list of procedures for each area, with responsibility, timing and sample extent. The plan gives direction; the programme gives instructions. Both are updated as the audit progresses.

Example 2

Sundaram Textiles Ltd has high inventory in several godowns and weak controls over purchases. The audit team asks how planning will respond and what should be recorded in working papers. (6 marks)

Show the solution

Provision: SA 200 requires the auditor to plan effectively and direct effort to areas most expected to contain risks of material misstatement, with less effort elsewhere.
Analysis: inventory and purchases are higher-risk areas because of the volume of stock and weak controls.
Strategy: allocate more experienced staff and more time to inventory and purchases, and schedule physical verification near the year end.
Programme: include steps such as attending stock counts, testing cut-off, tracing purchase entries to supporting documents, and testing a larger sample of purchase transactions.
Working papers: record the risk assessment, the procedures performed, the samples and results, the evidence obtained, and the conclusion on each area.
Skepticism and review: apply professional skepticism to management explanations, and have senior team members review the papers.
Conclusion: effort is concentrated on high-risk areas, and the documentation lets an experienced auditor with no previous connection understand the significant judgments made.

Answer: The auditor will assess inventory and purchases as high risk, focus the strategy and resources there, design a detailed programme with more extensive testing, and record the risks, procedures, evidence and conclusions in working papers that another experienced auditor could follow.

Exam tips

For difference questions, write a short comparison with at least three points, such as scope, detail and user, rather than only two definitions.
In case questions, always start from the risk. Examiners reward answers that link the risky area to the programme step and to the working paper.
Quote or paraphrase SA 200 ideas: effective planning, focus on risk, professional skepticism, professional judgment and sufficient documentation.
Mention that the plan is revised during the audit. It is a quick mark many students miss.
Do not quote SA paragraph numbers unless you are sure. State the idea and name the standard instead.

Practice questions from Audit Principles and Techniques

Audit Planning, Strategy and Programme in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Audit Planning, Strategy and Programme: frequently asked questions

What is the difference between an audit plan and an audit programme?

The audit plan is the broader document, flowing from the overall strategy, that sets the nature, timing and extent of procedures. The audit programme is the detailed list of procedures for each area. The programme is used by staff to carry out the work.

Why are audit working papers important?

They record the work done, evidence obtained and conclusions reached. They support the audit report, help supervision and review, and show that the audit followed the standards. They should allow an experienced auditor with no prior connection to understand significant judgments.

How do you prepare an audit programme?

Assess risks in each area, decide the objective of each area, and list procedures to meet it with their nature, timing and extent. Assign staff and time, then review and update the programme as the audit proceeds.

Can the auditor change the audit plan during the audit?

Yes. If risks change or new information appears, the auditor revises the strategy, plan and programme. Further procedures may be extended or other procedures performed if the evidence is not sufficient and appropriate.