Question

An audit program is:

A) The detailed plan of audit procedures to be performed in the course of the audit.
B) An overview of the company and a general plan for the audit work to be accomplished.
C) A generic document that auditing firms have developed to lead the process of the audit through a systematic and logical process.
D) A budget of the time that should be necessary to complete each phase of the audit procedures.

Answer 1

An audit program is a detailed plan of audit procedures to be performed during an audit. It's a crucial component that auditing firms use to ensure accurate financial reporting and plays a significant role in corporate governance.

Step-by-step explanation:

An audit program is defined as A) The detailed plan of audit procedures to be performed in the course of the audit. This involves the systematic steps that auditors follow to gather and analyze data to form an opinion about the financial records and controls of a company. It is specifically tailored to the company's individual circumstances and the objectives of the audit. The board of directors, as part of corporate governance, plays a crucial role in overseeing these processes.

Corporate governance is designed to protect the interests of shareholders and other stakeholders. The failure in corporate governance, as in the case of Lehman Brothers, shows the importance of thorough and credible audit programs to prevent misleading financial reporting to investors and the public. Audit programs are vital tools utilized by auditing firms to promote transparency and accountability in financial reporting.