Final answer:
The correct option is (3)Substantive procedures.
The portion of an audit that is least likely to be completed before the balance sheet date is substantive procedures, as these are performed after the balance sheet date to test year-end balances.
Step-by-step explanation:
Which portion of an audit is least likely to be completed before the balance sheet date? The correct answer is (3) Substantive procedures. Substantive procedures involve obtaining direct evidence to confirm the accuracy of financial statement amounts and disclosures, and they are typically performed after the balance sheet date. This is mainly because auditors need to test the year-end balances of accounts and transactions that have occurred throughout the entire period under audit.
Tests of controls and the assessment of control risk are generally performed during the interim audit phase, prior to the year-end, to evaluate the effectiveness of a client's internal controls. The issuance of an engagement letter is a preliminary step in the audit process, which establishes the auditor's responsibilities and the terms of the engagement, and occurs before any actual audit work begins.