There are many important reasons to diligently plan for an audit.If an audit firm wrongly skips the planning stage of an audit,what will be detrimental relative to fraud?
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 a critical stage in identifying the risks of material misstatement due to fraud in the financial statements. Without proper planning, the audit firm may not adequately identify the types of fraud that may occur in the client company, making it difficult or impossible to detect and prevent fraud during the course of the audit. This can be detrimental to the overall integrity of the financial statements and potentially harm the audit firm's reputation. Choices A, C, and D are incorrect because they do not relate specifically to the impact of skipping the planning stage on fraud detection.

There Are Many Important Reasons to Diligently Plan for an Audit.If