ACCA Advanced Audit and Assurance (AAA) Practice Exam

Interim audits are designed to be carried out at which point?

1. At the end of the financial year

2. Before the financial statements are prepared

3. During the period of review

4. Only after final audits

The correct answer is: During the period of review

Interim audits are designed to be conducted during the period of review, which allows auditors to assess a company's financial statements and operations at a point before the financial year-end. This timing is particularly useful for identifying potential issues and making recommendations for improvements before the final audit occurs. The purpose of an interim audit is to provide a preliminary review of the company's financial position and to ensure that the financial reporting process is on track and compliant with relevant standards. Conducting the audit at this stage enables auditors to address any identified weaknesses early, ensuring that the year-end financial statements are more accurate and reliable. It also allows management time to respond to the auditor's findings and to implement corrective actions if necessary, ultimately leading to a smoother final audit process. The other timing options mentioned do not align with the purpose or function of interim audits, as they are more suited to a complete review or audit at the end of the financial year or after final audits have been conducted.