The Auditor Has to Develop an Audit Plan That Responds

question 54

Multiple Choice

The auditor has to develop an audit plan that responds to the risks of material misstatement identified in the prior steps of the audit process.The auditing standards require the auditor to develop an audit plan that includes which of the following elements?

• A)the nature,timing,and extent of planned risk assessment procedures to allow the auditor to estimate the risk of material misstatement at the financial statement and assertion level
• B)the nature,timing,and extent of audit procedures to establish the assessed risks of material misstatement at the relevant assertion level
• C)the nature,timing,and extent of audit procedures to test the effectiveness of internal controls
• D)other audit procedures that need to be done to allow the auditor to comply with generally accepted auditing standards

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Definitions:

Finite Population

A set of data or a population that is limited or fixed in size, often used in statistical analysis to apply different formulae compared to an infinite population.

Average Service Time

The mean duration needed to complete service for a customer or process a task, commonly used in the evaluation of service and operational efficiency.

Service Factor

A multiplier used in engineering and operations management to account for potential variability in demand or capacity, ensuring systems can handle peak loads.