Final answer:
The scope of the audit indicates the audit's time period, materiality level, and expected duration, which are vital for a clear understanding between the auditor and client.
Step-by-step explanation:
The scope of the audit defines the time period, level of materiality, and expected time for the audit. This includes what records and transactions will be examined, what constitutes a significant error or omission, and the timeframe in which the audit is to be completed. The scope is critical as it determines the depth and breadth of the audit engagement and ensures that both the auditor and the client understand what is expected throughout the auditing process.