What Should Be the First Step in the Auditing Process

question 41

Multiple Choice

What should be the first step in the auditing process?

• A)Secure the commitment of top executives and directors
• B)Define the scope of the audit
• C)Establish a committee to oversee the audit
• D)Collect and analyze data
• E)Review organizational mission, goals, values, and policies

---

Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the owners' share.

Land

A fixed asset that represents property; it is considered a non-depreciable asset used in operations or investment.

Investment by Owner

The contribution of cash or other assets by an owner into their business, increasing the equity of the company.

Deficit

The amount by which expenses surpass income or revenues, resulting in a loss.