Planning the audit of the financial statements

This thesis is devoted to the process of planning the audit file. Thesis is divided into 3 chapters, of which the first chapter is devoted to the audit. This chapter theoretically defines the term audit and its types. Furthermore, the chapter focuses more closely on the audit of financial statements, its history (development) and audit regulation. The chapter also defines the audit terms materiality, risk and assertion. Finally, the process of accepting an audit contract is described, which is related to the evaluation of the risk of accepting the contract. The second chapter is dedicated to audit planning. The theoretical knowledge of this chapter is mainly drawn from ISA standards and from the Audit Guide published by the Chamber of Auditors of the Czech Republic. The chapter describes the method of determining materiality and the process of identifying and evaluating risks through understanding the activity of the accounting unit, its environment and business area. In the last chapter, the process of planning the audit file is demonstrated on the example of a selected company. The chapter introduces the company and its activities, describes the process of evaluating the acceptance of the contract and the activities carried out before the planning phase. On the basis of planning significance, significant areas of financial statements are identified. Analytical procedures are performed and the internal control environment is described. Risks are identified based on an understanding of the entity. Subsequently, audit tests are defined to reduce the identified risks to an acceptable level.