Question

The audit process includes Plan the audit to identify and assess risks of material misstatement for account balances, classes of transactions, and disclosure. Select one: True False Clear my choice

Answer 1

True

Explantion

Audit Process includes follwoing steps

Pre-plannig: Pre-planning provides a preliminary understandings of the risks,responsibilities,and key process of the operation being audited.Pre-planning is generally completed during annaul audit plan development process or prior to Audit Kick-off. During Pre-planning , Auditor will meet people with head of the department to gain general understanding of scope and scale of operations. The Auditor may also requests a site tour or introduction of key staff

Planning : Planning invloves developing detailed understanding of the operataion's process . Planning generally involves face to face interviews, sample data extraction, and development of a testing plan for feildwork.

Feildwork : During feildwork , transactional or analytical analysis will be performed to detaermine the adequcay of internal controls- are things working the way they intended ? . Here Autior will check the transactions and balances to iassess the risk of material misstatements.

Reporting : Documentation of any identified findings will be summarized in a report to management.The report will identify those issues requiring solution.