Planning and Supervision

Question 1

What does Planning an Audit mean?

Answer 1

States that the auditor’s objective is to plan the audit so that it will be performed in an effective manner

Question 2

The engagement partner and other key members of the audit team should be involved in planning what activities?

Answer 2

1 The nature and extent of planning, which varies with the size and complexity of the entity, the audit team’s experience with the entity, and changes in circumstances occurring during the engagement
2 Encompasses risk assessment procedures, understanding the applicable legal and regulatory framework, the determination of materiality, the involvement of specialists, and so forth
3 Engagement partner may delegate portions of planning and supervision to other personnel

Question 3

The auditor should address the following matters at the beginning of the engagement (called Preliminary Engagement Activities)?

Answer 3

1 Perform appropriate procedures to address quality control issues related to the continuance of the client relationship and the specific audit engagement
2 Evaluate compliance with relevant ethical requirements related to quality control considerations
3 Establish an understanding of the terms of the engagement

Question 4

What’s an Audit Plan (aka Audit Program)?

Answer 4

Is more detailed than the overall strategy and deals with the nature, timing, and extent of audit procedures to be performed

Question 5

In establishing the overall audit strategy, the auditor should?

Answer 5

1 Identify relevant characteristics
2 Identify the reporting objectives
3 Determine the nature, timing, and extent of necessary resources for the engagement
4 Overall strategy the affects the auditor’s decisions regarding the allocation of audit resources to specific audit areas
5 Communication with those charged with governance

Question 6

The auditor should determine whether there is a need for ______________ on the engagement.

Answer 6

Specialized skills

Question 7

The auditor should address the following matters in the audit documentation…

Answer 7

1 The overall audit strategy
2 The audit plan
3 any significant changes made to the audit strategy or the audit plan during the audit engagement, along with the reasons for any such changes.