Which of the following statements is always true when an auditor is planning a year-end audit? A)An engagement should not be accepted after the fiscal year-end. B)An inventory count must be observed at the balance sheet date. C)The client's audit committee should not be told of any specific audit procedures which will be performed. D)An audit plan should be developed that includes a time budget.

Question

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Developing an audit plan that includes a time budget is a fundamental step in planning a year-end audit. It helps the auditor allocate time and resources effectively and efficiently. While statement A is generally true, there may be exceptional circumstances where an engagement may be accepted after the fiscal year-end. Statement B is not always true as there may be alternative audit procedures that can be performed instead of observing an inventory count at the balance sheet date. Statement C is also not always true as the audit committee may need to be informed of important audit procedures or findings for effective oversight.

Which of the Following Statements Is Always True When an Auditor