In Planning the Audit, an Auditor Takes 3 Basic Steps

question 73

Essay

In planning the audit, an auditor takes 3 basic steps in determining the audit procedures to be performed for any business cycle or class of transactions in order to gather audit evidence concerning possible misstatement due to error or fraud.List those three basic steps below.

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Definitions:

Sensitivity

The ability of a test to correctly identify those with the disease (true positive rate), indicating its reliability in detecting cases.

Infectious Disease

Diseases caused by pathogenic microorganisms, such as bacteria, viruses, parasites, or fungi; can be spread directly or indirectly from one person to another.

Sequential Tests

A statistical analysis method where data is evaluated in a sequence, allowing for earlier decision making without waiting for all data.

Net Sensitivity

A measure in screening and diagnostic tests that quantifies the ability of the test to correctly identify those with the condition.