Question

Which of the following audit phases would generally be conducted before all of the others listed below?

1) Auditing business processes and related accounts.
2) Evaluation of audit evidence.
3) Gaining an understanding of the auditee's industry.
4) Consideration of internal control systems.

Answer 1

An auditor would first gain an understanding of the auditee's industry before proceeding with other phases of the audit, such as assessing business processes and internal controls.

Step-by-step explanation:

The audit phase that would generally be conducted before all the others listed is 'Gaining an understanding of the auditee's industry'.

This initial phase is crucial for auditors to comprehend the environment in which the business operates. It precedes other phases such as auditing business processes, evaluating audit evidence, and considering internal control systems.

This phase involves gathering and examining evidence to determine the accuracy, completeness, and reliability of the financial statements and other relevant information. It is important to evaluate the audit evidence before auditing business processes and related accounts, gaining an understanding of the auditee's industry, and considering internal control systems.

3) Gaining an understanding of the auditee's industry is correct.