Audit Planning - Audit Budget Template Workpaper

Whether operating as an in-house internal audit function, or performing internal audit services for a client, a budget is an important document that should be prepared at the beginning of each review.

A budget should not just be 'slapped together' as part of the audit admin processes. It is important that a budget is consciously thought out, with consideration given to some of the following factors:

• Amount of effort required per scope area;

• Number of resources required (and any specialists);

• The level and rate (where applicable) of audit team members involved;

• The skills of the client / business area to be audited, and the level of involvement required in managing them throughout the audit process; and

• Technicality of the topic (do we require specialists knowledge, or will it require multiple reviews?); and

• Ease of finalising an audit report.

A preview of the budget template is included below:

As you proceed through the planning process, you should begin to form an answer against each of the above points. This will help you to develop a realistic budget.

A budget is important as it:

• Holds the audit team accountable and can prevent slippage;

• For private firms, helps to manage costs and work within margins;

• Helps future auditors understand the length of time taken to complete the audit procedure; and

• Can show areas that required significantly more effort than required.

The budget should be updated on a regular basis (weekly), and communicated to all team members to ensure they are aware of the current position.

It is essential that a budget is never seen as a constraint. A budget should not impact the level of detail, effort or time required to complete the audit procedures. A budget should not impact on audit quality.

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