Financial Audit 2 - 18A4 - Audit Planning

Which of the following is not one of the three main reasons why the auditor should properly plan engagements?

• To enable the auditor to obtain sufficient appropriate evidence

• To enable proper on-the-job training of employees

• To avoid misunderstandings with the client

• To help keep audit costs reasonable

Which of the following information gathering activities or attention directing activity is not a form of analytical procedure?

• Comparing current year salaries to prior year salaries

• Reading and studying the company minutes

• Review of prior year file for adjustments made

• Recalculating the amortization of equipment

Analytical procedures used in planning an audit should focus on identifying .......

• The predictability of financial data from individual transactions

• Material weaknesses of internal control

• Areas that may represent specific risks relevant to the audit

• The various assertions that are embodied in the financial statements

The purpose of a balance-audit program is to specification of .........

The risk of ........ is the risk that the financial statements contain a material misstatement due to fraud or error prior to the audit.