Terms of Reference, Audit Scope, Scoping Document, Assignment Plan. These are a few of the news commonly used for the main document issued prior to the commencement of the audit.
The Terms of Reference document is critical to the audit. It sets the audit objectives, scope and approach for the audit. Furthermore, it shows the risks being addressed by the audit, and, if desired, can show coverage against company wide objectives or strategies.
It is important that the Terms of Reference document is correct. Objectives and scope should be well defined to avoid any confusion or 'scope creep', and timeframes should be mutually agreed with the business area / client to ensure reports can be delivered on time to the audit committee without any unnecessary stress on either the business or the audit team.
The Terms of Reference document should be reflective of the work performed during the planning process. It should also be reflective of discussions with the business area / client. Care should be taken to ensure there is sufficient management buy-in to the Terms of Reference so that the client can feel a part of the audit, rather than a victim of it.