Auditing and EthicsQuestion 5685 of 212
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15. Which of the following statements is inappropriate?

Options

AOnce the overall audit strategy is established, an audit plan can be developed to address the various matters identified in the overall audit strategy.
BThe establishment of an overall audit strategy as well as detailed audit plan are not necessarily discrete or sequential process.
CAudit Strategy and Audit plan are not inter-related as changes in one may not result in consequential changes to the other.
DThe Audit plan is more detailed than the Audit Strategy that includes the nature, timing and extent of audit procedures to be performed by engagement team members. (2 Marks) Answer Key MCQ No. Correct Option
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Correct Answer

✅ Option C — Audit Strategy and Audit plan are not inter-related as changes in one may not result in consequential changes to the other.

All Options:

  • AOnce the overall audit strategy is established, an audit plan can be developed to address the various matters identified in the overall audit strategy.
  • BThe establishment of an overall audit strategy as well as detailed audit plan are not necessarily discrete or sequential process.
  • CAudit Strategy and Audit plan are not inter-related as changes in one may not result in consequential changes to the other. ✓
  • DThe Audit plan is more detailed than the Audit Strategy that includes the nature, timing and extent of audit procedures to be performed by engagement team members. (2 Marks) Answer Key MCQ No. Correct Option

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Detailed Solution & Explanation

To determine which of the given statements is inappropriate, let's analyze each option in the context of auditing principles and practices.
Option A suggests that once the overall audit strategy is established, an audit plan can be developed to address the various matters identified in the overall audit strategy. This statement is appropriate because it aligns with the logical sequence of planning an audit. The audit strategy outlines the overall approach to the audit, and the audit plan details how this approach will be implemented.
Option B states that the establishment of an overall audit strategy as well as a detailed audit plan are not necessarily discrete or sequential processes. This is also an appropriate statement because, in practice, the development of the audit strategy and the audit plan can be iterative. As more information becomes available, both the strategy and the plan may need to be adjusted.
Option C claims that Audit Strategy and Audit plan are not inter-related as changes in one may not result in consequential changes to the other. This statement is inappropriate because the audit strategy and the audit plan are closely interrelated. The audit strategy informs the audit plan, and changes in the strategy (such as a change in the assessed risk of material misstatement) would typically require corresponding changes in the audit plan (such as adjusting the nature, timing, or extent of audit procedures).
Option D states that The Audit plan is more detailed than the Audit Strategy that includes the nature, timing and extent of audit procedures to be performed by engagement team members. This statement is appropriate as it accurately describes the relationship between the audit strategy and the audit plan. The audit plan is indeed more detailed, outlining specific procedures and tasks, whereas the audit strategy provides the overarching approach.
Hence, **Option C** is the correct answer.

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