ICAEW ARF · Chapter 3 · Question 1 of 13
Which of the following is NOT an objective of planning an audit?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) To ensure that the financial statements contain no material misstatements
Explanation
Planning helps the auditor focus on the key risk areas, deal with problems early, organise the engagement and allocate staff with appropriate skills. However, planning cannot ensure that there are no material misstatements; the directors are responsible for the financial statements, and the auditor gives only reasonable assurance.
More Planning, materiality and risk assessment MCQs
- Q3An auditor has assessed both inherent risk and control risk for trade receivables as high. What is the appropriate response?
- Q4An audit firm sets overall materiality at 5% of profit before tax. A client's draft profit before tax is £840,000. What is overall…
- Q5Overall materiality for an audit is £60,000. The firm sets performance materiality at 75% of overall materiality and treats misstatements…
- Q6Which of the following misstatements is most likely to be material by its nature, even though the amount is small?
- Q7Which of the following is most likely to indicate a high inherent risk?