There are many important reasons for diligent audit planning.If an audit firm wrongly skips the planning stage of an audit,what will be the effect relative to fraud detection?
A)The firm will not be able to apply GAAP to the financial statements.
B)The firm will not adequately identify the types of fraud that may occur in the client company.
C)The firm will not be able to perform direct tests of account balances.
D)The firm will lack the competency and technical training necessary to complete the audit in accordance with GAAS.

Question

Quizplus · Accepted Answer

Planning is crucial for identifying areas of the financial statements that are more susceptible to fraud. Without proper planning, the auditors may not adequately identify potential fraud risks and may miss out on detecting fraud within the audited company. While the other options A, C, and D are all important aspects of audit planning, they do not specifically relate to the detection and prevention of fraud.

There Are Many Important Reasons for Diligent Audit Planning