In evaluating cost of evidence, which of the following phases of the audit usually has the lowest cost?
A) test transactions and account balances
B) understanding of client and industry
C) assessing risk of material misstatement
D) both test transactions and account balances and understanding client and industry

Question

Quizplus · Accepted Answer

Understanding the client and industry typically incurs the lowest cost because it involves preliminary activities such as reviewing industry reports and conducting inquiries, which are generally less resource-intensive than detailed testing or in-depth risk assessments.

In Evaluating Cost of Evidence, Which of the Following Phases