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Questions and Answers
What is the primary purpose of audit planning?
What is the primary purpose of audit planning?
- To identify the scope and objectives of the audit (correct)
- To perform detailed testing of transactions
- To finalize the financial statements
- To prepare the management letter
What is a key benefit of effective audit planning?
What is a key benefit of effective audit planning?
- Guaranteed detection of all fraudulent activities
- Increased billable hours for the audit team
- Exemption from regulatory compliance
- Reduced risk of overlooking important areas (correct)
Who is primarily responsible for audit planning within an audit team?
Who is primarily responsible for audit planning within an audit team?
- The finance department of the audited company
- The junior staff members
- The engagement partner (correct)
- The external stakeholders
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Study Notes
Audit Planning
- Primary purpose of audit planning: to establish the scope, objectives, and approach of the audit
- Key benefit of effective audit planning: enables auditors to focus on high-risk areas, allocate resources efficiently, and identify potential problems early on
- Primary responsibility for audit planning: rests with the engagement partner or the lead auditor within an audit team
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