CS Professional · Internal and Forensic Audit · Internal Audit: Introduction and Overview
Before starting an engagement on the procurement cycle of Kaveri Pharma Ltd, the internal auditor holds a meeting with the procurement head, reviews past reports and flowcharts the purchase process. Which stage of the engagement process is this?
This is the planning stage, where the auditor understands the area under review. Meeting the auditee, studying earlier reports and flowcharting the purchase process help identify risks and shape the audit programme before any testing or reporting begins.
- AReporting and follow-up
- BPlanning and understanding the area under reviewCorrect
- CSubstantive testing of transactions
- DClosing meeting
Explanation
Meeting the auditee, reviewing earlier reports and documenting processes through flowcharts are preliminary survey activities carried out in planning to understand the area and identify risks. Testing and reporting come later, after the audit programme is prepared.
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