Audit Planning MCQs 2026

Risk assessment procedures is best described as

1. A inquiries analytical procedures and observation to identify risks ✓
2. B only final analytical review ✓
3. C no fraud discussion ✓
4. D ignore IT environment ✓

Audit Planning: Audit plan can be defined as

1. A more detailed program of nature timing and extent of procedures ✓
2. B single generic template always ✓
3. C no update during audit ✓
4. D client prepared plan only ✓

Materiality in planning is best described as

1. A zero tolerance for all items ✓
2. B threshold used to plan nature timing and extent of procedures ✓
3. C same as tax exemption limit always ✓
4. D client chosen number without analysis ✓

Audit Planning: Audit timetable can be defined as

1. A open-ended with no deadlines ✓
2. B schedule of key milestones from planning through reporting ✓
3. C only client marketing calendar ✓
4. D ignore reporting deadline ✓

Regarding Team briefing in Audit Planning, the accurate view is

1. A no communication to staff ✓
2. B only email to client ✓
3. C post-report discussion only ✓
4. D communication of strategy risks and assignments to engagement staff ✓

Which statement about Using experts is correct

1. A auditor must be expert in all fields ✓
2. B auditor may use specialist for valuations or complex areas ✓
3. C experts replace auditor opinion ✓
4. D no documentation of expert work ✓

Audit Planning: Communication with those charged with governance can be defined as

1. A only communicate to marketing staff ✓
2. B after report signed only ✓
3. C timely discussion of plan scope and significant findings ✓
4. D never discuss fraud risk ✓

Regarding Planning analytical procedures in Audit Planning, the accurate view is

1. A comparing expectations to preliminary data to identify anomalies ✓
2. B only at report stage ✓
3. C ignore industry trends ✓
4. D no investigation of variances ✓

In Audit Planning, Preliminary engagement activities primarily means

1. A immediate signing of clean opinion ✓
2. B no client inquiry ✓
3. C continuance evaluation and ethical compliance before acceptance ✓
4. D ignoring independence ✓

A key aspect of Understanding the entity is that it involves

1. A only reading prior year report ✓
2. B no management inquiry ✓
3. C obtaining knowledge of business industry and internal control ✓
4. D ignoring regulatory environment ✓

Overall audit strategy document is best described as

1. A client product catalogue ✓
2. B employee birthday list ✓
3. C record of key decisions on team deployment and reporting deadlines ✓
4. D cafeteria schedule ✓

A key aspect of Performance materiality is that it involves

1. A always double overall materiality ✓
2. B equal to trivial threshold ✓
3. C not used in practice ✓
4. D amount set below overall materiality to reduce aggregation risk ✓

Which statement about Using internal auditors work is correct

1. A evaluating objectivity and competence before relying on work ✓
2. B automatic reliance always ✓
3. C ignore internal audit charter ✓
4. D no coordination ✓

A key aspect of Initial audit planning is that it involves

1. A additional procedures when no prior year audit by firm ✓
2. B identical to recurring always ✓
3. C no opening balance work ✓
4. D ignore predecessor auditor ✓

Audit Planning: Recurring audit planning can be defined as

1. A start fresh ignoring history always ✓
2. B no review of prior misstatements ✓
3. C discard all prior working papers ✓
4. D updating plan based on prior knowledge and changes ✓

In Audit Planning, Audit planning primarily means

1. A developing overall strategy and detailed plan for the engagement ✓
2. B starting fieldwork without objectives ✓
3. C ignoring client industry ✓
4. D skipping risk assessment ✓

Regarding Audit strategy in Audit Planning, the accurate view is

1. A high-level approach including scope timing and resource allocation ✓
2. B detailed tick list only ✓
3. C random test selection ✓
4. D no partner involvement ✓

Significant risks is best described as

1. A immaterial rounding errors only ✓
2. B typographical errors only ✓
3. C all risks treated equally ✓
4. D risks requiring special audit consideration including fraud risk ✓

Regarding Trivial threshold in Audit Planning, the accurate view is

1. A same as planning materiality ✓
2. B zero always ✓
3. C misstatements below level not accumulated except in aggregate ✓
4. D equal to net profit ✓

A key aspect of Group audit planning is that it involves

1. A ignore subsidiaries always ✓
2. B only parent ledger review ✓
3. C planning for components and consolidation in group financial statements ✓
4. D no component auditors ✓