Which phase of audit planning ensures operational and business changes are included in the audit plan?

Defining audit scope is the critical phase of audit planning that ensures operational and business changes are incorporated into the audit plan. During this phase, auditors assess the boundaries and focus of the audit, taking into account the organization's current operational environment and any significant changes that may have occurred since the last audit. This includes new business processes, technological updates, regulatory changes, and changes in organizational structure or strategy, all of which can impact the effectiveness and relevance of the audit.

By explicitly defining the scope, auditors set a clear framework for what will be examined and ensure that the audit does not overlook important areas that could affect compliance, risk management, and overall organizational performance. This proactive approach helps align the audit with the current organizational landscape and ensures that it adequately addresses operational risks and business objectives, making it vital for effective audit planning.