June 29, 2018

Name
Owner
E. Luna St. Butuan City

Dear Sir:
Good day!
We are privileged to confirm our interpretation of the work we will be conducting in developing
our audit plan pertaining to the operations currently in placed in the processes of the operations
and services.
The scope of work will only involve inquiry, interview and operation and human resource
management so as to develop flexible audit plan. Understanding the operation may be done
through conducting an interview and direct observation. It is to be emphasized that we, are not
going to conduct any test of controls nor substantive audit testing as our only objective is to
understand existing and human management system and develop an audit plan.
Audit plan generally present details of how the audit is going to be conducted. It identifies
present and describes the manner in which an organization conduct business, with the objective
of pointing out improvement that will increase its efficiency and effectiveness. It also lays down
the audit objectives for management’s assertion identified, together with the corresponding audit
procedures. The audit plan is written output after the audit planning stage.
The audit planning gives in sufficient details the understanding of the auditors in the operational
process and control of the business. It is the phase in the audit process where a decision as to the
auditability of the subject matter is made.
In this case, the audit plan may be executed further to test the assertion of the management about
the operation, which primarily is their responsibility. These audits primary objective is to add-
value to the business and find opportunities for improvement.

The following are the objectives of the auditors in relation to the proposed audit planning:

To be able to:

 Determine the current practice and process in the services they offer through
observations and interviews.
 Identify the scarcity of the business as to weighing their operations with the
standard by comparing the observations using the standards used.
 Suggest actions that would help them achieve the standards.
Resource assignment and Timeline

Objectives Procedure Subject Auditor Date

1. Identify 1. Interview 1. Employees 1.
problem 2. Check 2. Process
2. Determine 3. Observe Transactions
Scarcity 3. Practices
3. Determine
Current
Practices

We, as auditors practice a high level of confidentiality and so we ensure to the privacy of information
gathered from your company. In case of violation of this principle, we shall face whatever the
consequences. The result of the audit planning is written in audit plan. A significant information obtained
during the audit planning stage through inquiry, interviews and observation should remain confidential.

We, the auditors, shall conform with the definition of Internal auditing which is an independent,
objective assurance and consulting activity designed to add value and improve an organization's
operations, as well as apply the principles of the Code of Ethics of Internal auditors namely (1) integrity
(2) objectivity (3) confidentiality (4) objectivity and shall encompass all the mandatory elements of the
IPPF Standards.

This letter serves as our engagement agreement pertaining to the conduct of the audit planning to he
conduct of the audit planning as we are partners throughout the whole duration. If you have further
questions and clarifications, please do not hesitate to call us at 0966-154-6974 or e-mail as us

Respectfully yours,

Chief Audit Executive