What is the first step to developing audit objectives?
A) Divide the financial statements into cycles.
B) Know general audit objectives for classes of transactions and accounts.
C) Understand objectives and responsibilities for the audit.
D) Know management assertions about accounts.

Question

Quizplus · Accepted Answer

Before developing audit objectives, it is important to understand the objectives and responsibilities for the audit, including any regulatory or legal requirements. This knowledge will guide the development of specific audit objectives that align with the overall goals of the audit. Steps such as dividing financial statements into cycles, knowing general audit objectives, and understanding management assertions will come after this initial understanding is established.

What Is the First Step to Developing Audit Objectives