The audit process used by the internal audit activity of a large wholesale clothing company does not include an engagement letter or project approval document. The most serious consequence of this deficiency in the process is that the:
A) Audit schedule may not be optimal from the engagement client's perspective.
B) Audit objectives may not be understood by management of the area being audited.
C) Audit resources may not be sufficient.
D) Audit plan priority may have changed.

Question

Quizplus · Accepted Answer

An engagement letter or project approval document typically outlines the audit objectives, scope, and expectations. Without it, management may not fully understand the audit's purpose, leading to misalignment and potential issues in cooperation and focus.

The Audit Process Used by the Internal Audit Activity of a Large