Audit Planning Process and Internal Control Review for Le Chateau

This report details the audit planning process, specifically for Le Chateau, a company operating in the fashion retail sector. The report begins with the announcement letter and initial meeting stages, followed by a preliminary survey where the auditor gathers detailed information about the firm'...Read More

AUDIT PLANNING MEMO

TABLE OF CONTENTS
Audit planning process................................................................................................................3
REFERENCES................................................................................................................................5

Audit planning process Announcement letter: This is the first stage of audit planning process under which
announcement letter is prepared by the Internal audit Director and is same will be send to the
Le Chateau top managers. Initial meeting: In the second stage which is initial meeting information about Le Chateau
system, facilities, personnel and equipment is provided to the auditor by the company (Aad
and et.al., 2010). In this stage all sort of business information’s will be given by the
mentioned company to the auditor which help him in understanding the firm business and
planning same in the proper manner. Preliminary survey: In preliminary survey auditor gather detailed information about the firm.
In this auditor can collect information about the sales of ladies and men cloths, footwear’s
and accessories. By using preliminary analytics auditor can identify the relationship between
the sales volumes of all these fours products. If in current time period if trend get changed in
terms of relationship among four products sales value then he can evaluate sales bill of all
relevant products of Le Chateau in order to detect fraud. In this stage usually information
about the firm accounting system is collected. Deep analysis of same is done. Apart from this
facts and figures about firm business operations is also gathered by the auditor. This help him
in identifying the areas in which he needs to pay special attention while doing audit of the
company accounts. In this stage auditor will do preliminary analytics by using which he will
carried out detail analysis of facts and figures (Aad and et.al., 2012). In this stage auditor will
evaluate past years financial statements by using statistical tools. The results of analytics will
help auditor in identifying the elements on which he needs to pay due attention during audit
process. Internal control review: This is the one of the main stage of audit planning. In this stage
auditor identify and evaluate internal control system of the Le Chateau. Internal control is a
process under which transactions are recorded and scrutiny of same is done in proper manner
.In order to ensure that all transactions are recorded at fair value in the Le Chateau book of
accounts evaluation of the internal control that are present in the firm accounting system will
be done. A better internal control system ensured that errors in the accounting will be
detected and rectified on time. A good internal control system ascertain that any fraudulent
practice will not happen in the organization (Internal control, 2016). If anyone will make an

attempt to do so then same will be traced on time. Auditor make an attempt to identify weak
points of the internal control system. On that basis he determine the things on which he needs
to pay special attention during audit of company accounts. Risk assessment of the weak areas
of the accounting system and controls will be done in this stage. In this way relevant stage
will be performed. Audit program: This is the final stage of the audit process under which approach that will be
followed to do audit of company accounts is determined. In this stage materiality in respect
to financial statements of Le Chateau will be identified in terms of cost and profit values that
are in the financial statements of the firm. This will help auditor in identifying areas in which
he needs to pay special attention while doing audit of accounts.

REFERENCES
Books & journals
Aad, G. and et.al., 2010. The ATLAS simulation infrastructure. The European Physical Journal
C. 70(3). Pp.823-874.
Aad, G. and et.al., 2012. Observation of a new particle in the search for the Standard Model
Higgs boson with the ATLAS detector at the LHC. Physics Letters B. 716(1). Pp.1-29.
Online
Internal control, 2016. [Online]. Available through :<
http://www.businessdictionary.com/definition/internal-control.html>. [Accessed on 14th
November 2016].
Le Chateau, 2015. [PDF]. Available through :<
http://ir.lechateau.com/downloads/annual/2014/en/CTU-AR-Eng-2015.pdf>. [Accessed on
15th November 2016].