An Experienced Audit Team Will Begin Planning the Audit Before

question 43

Multiple Choice

An experienced audit team will begin planning the audit before it knows all the specific information about a particular client company because

• A) experienced auditors know the general framework of what needs to be done on any audit.
• B) auditors experienced in the client's industry understand the activities and risks of the industry, which gives them an understanding of the important financial statement accounts and ICFR areas.
• C) auditors experienced with this client company have already gained quite a bit of information from the client acceptance or continuance processes.
• D) all of the above

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Definitions:

Federal Outlays

Expenditures or spending by the federal government, including on programs, services, and interest on debt.

Federal Government Budget

An annual financial statement presenting the government's proposed revenues and spending for a financial year.

Servicing Debt

The process of paying interest and principal on borrowed funds, typically on a regular basis.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to a negative balance of trade.