Question

The preliminary audit strategy:

A) is set before the auditor understands the client's reasons for the audit.
B) guides the development of the audit plan.
C) is determined after the engagement staffing is set.
D) is the detailed steps to be followed for the substantive audit tests.

Answer 1

The preliminary audit strategy is the plan or approach developed by the auditor to guide the overall audit process. It is determined before the auditor fully understands the client's reasons for the audit and helps in the development of the audit plan.

Step-by-step explanation:

The preliminary audit strategy is the plan or approach developed by the auditor to guide the overall audit process. It is determined before the auditor fully understands the client's reasons for the audit, making option A incorrect. The strategy helps in the development of the audit plan, so option B is the correct answer. The engagement staffing, mentioned in option C, is determined after the audit strategy and plan are set, making it an incorrect option. Option D, which suggests that the preliminary audit strategy is the detailed steps for the substantive audit tests, is also incorrect because the audit strategy is more comprehensive and encompasses the whole audit process.