Audit Planning. Simulation #20005
2. Describe which controls will be tested
Audit plan
1. Document that the audit team will send accounts receivable confirmations
Audit plan
5. Describe the methods to obtain an understanding of the entity and its environment sufficient to assess the risk of material misstatement
Audit plan
8. Record which audit team members will perform which specific procedures
Audit plan
10. Budget audit team hours to high-risk areas
Audit strategy
3. Determine the basis of reporting for the financial statements
Audit strategy
4. Determine materiality levels
Audit strategy
6. Assign audit team personnel
Audit strategy
7. Determine dates for fieldwork
Audit strategy
9. Document the industry-specific reporting requirements
Audit strategy
Assign each of the following items to either the audit strategy or the audit plan. (Click on the indicated cell and select the appropriate answer from the menu provided. A selection must be made for each cell.)
The audit strategy determines the characteristics of the engagement that defines its scope, allows the auditor to determine key dates and reporting objectives, and considers factors such as materiality and preliminary identification of areas where there may be a higher risk of material misstatement. The audit strategy helps the auditor assign resources. The audit plan, however, is more detailed than the audit strategy and includes the nature, timing, and extent of audit procedures to be performed by audit team members in order to obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level.
