Question

When auditors begin auditing cash, they follow a standard sequence of work. The exact procedures will be tailored based on the nature of the controls that have been implemented and by the results of the auditors' risk assessment process.

a) True
b) Customized
c) Fixed
d) Rigorous

Answer 1

Auditors customize their audit procedures based on the nature of controls and risk assessment, but the process remains methodical and adheres to auditing standards, making the statement true. Hence, option (a) is correct.

Step-by-step explanation:

When auditors begin the process of auditing cash, the sequence of work they follow is indeed tailored to fit the specific circumstances of the audit engagement. This is because the exact audit procedures must be designed to respond appropriately to the nature of the controls that are in place and the results of the risk assessment conducted by the auditors. Therefore, the statement that the procedures will be customized based on these factors is true.

The customization allows auditors to focus on higher-risk areas and ensures that the audit work is efficient and effective. Despite the customization, the approach is still methodical and is guided by the principles of generally accepted auditing standards. So while the sequence of audit procedures is not fixed, the thoroughness and rigor expected in an audit are consistent.