ACCA Advanced Audit and Assurance (AAA) Practice Exam

What is the primary goal of an audit strategy?

1. To increase the number of audit procedures

2. To set the scope, timing, and direction of the audit

3. To minimize the involvement of the engagement team

4. To limit the assessment of business risks

The correct answer is: To set the scope, timing, and direction of the audit

The primary goal of an audit strategy is to set the scope, timing, and direction of the audit. This involves establishing a framework that guides the audit process, ensuring that audit resources are allocated efficiently and effectively. By determining the scope, the audit strategy outlines the areas of focus, specifying which parts of the financial statements need detailed examination, which controls will be tested, and how these will align with the inherent and control risks identified during the planning phase. The timing aspect is crucial as it dictates when audit procedures will be performed. This scheduling is influenced by factors such as the client's reporting deadlines and the availability of key personnel. Additionally, the direction ensures that the audit team is aligned and understands the objectives and risks associated with the audit, promoting a structured approach for executing the audit plan. The other choices do not encapsulate the essence of an audit strategy as effectively. Increasing the number of audit procedures might not necessarily reflect an optimal approach; rather, effective strategies focus on quality over quantity. Minimizing team involvement might neglect the necessity of thorough investigation and oversight, and limiting the assessment of business risks could lead to an incomplete understanding of the client's financial environment, potentially compromising the audit's effectiveness. Thus, a well-defined audit strategy is essential for achieving a successful audit