Question

The three components of an audit program are:

a. objective, scope, and preliminary survey.
b. objective, scope, and program steps.
c. scope, program steps, and preliminary survey.
d. objective, scope, and narratives.

Answer 1

The three components of an audit program are objective, scope, and program steps, each playing a critical role in shaping the audit's direction and execution.

Step-by-step explanation:

The three components of an audit program are objective, scope, and program steps. The objective defines what the audit is trying to accomplish, such as ensuring financial statements are free of material misstatement. The scope outlines the boundaries of the audit, indicating what will and will not be covered. Lastly, the program steps are detailed procedures that the auditors will follow during the course of the audit to achieve the audit objectives and cover the defined scope.

If corrections in the survey example provided are needed, three potential issues could include a lack of clear objectives, inadequate scope definition, and incomplete program steps. To improve the survey:

1. Ensure clear objectives are established that reflect the purpose of the survey.
2. Delineate the scope carefully to cover all necessary data while excluding irrelevant information.
3. Outline comprehensive program steps to provide a step-by-step guide for conducting the survey effectively.