discussion questions

I need support with this Accounting question so I can learn better.

this homework needs to answer the following questions, and read other students answer then reply them.

The comment is often made: Begin with the end in mind.

In your opinion, which of the planning activities covered in the lectures or Gleim readings is most crucial? Why?

student 1:

I believe that the first step in the planning activities, specifically setting the objectives and scope, is the most important. When planning an engagement, it is important to know what the objectives of the engagement are; whether it is to evaluate design adequacy, to assess compliance or other objectives. This will assist in determining the scope of the engagement, as it will help in determining what is and is not going to be included in the engagement activities. Items included in scope are specific processes and their boundaries (the beginning point and ending point of the process), sub-processes, and components. This is important as it will directly affect the time frame limitation and budget set forth to complete the task. Making sure you have included everything necessary within the scope of the engagement will help to ensure that you finish the engagement on time and within budget. Setting the scope is also important as it will trickle down into every subsequent step in the engagement process.

student 2:

Risk identification is immensely important. As an auditor I can assure that this step is crucial in our documentation of the audit, especially legally. The work papers help disclose what areas of the organization may be subject to higher risk than others. This will of course help in allocating focus throughout the audit, as I am sure is done by internal auditors as well. For example, the inherent risk of cash controls at a bank may be significantly different than that of a non profit focusing in providing after school activities for children in low income households. We as auditors need to adapt our perception subjectively so that we can professionally carry out the audit without having to strenuously detail test every single aspect of an entity.