An estimate of the number of hours required to perform each step in the audit is called a(n) Blank______. Multiple choice question.
audit strategy time budget audit plan
The correct answer and explanation is:
The correct answer is audit time budget.
An audit time budget is an estimate of the number of hours required to perform each step or task during an audit. This budget is typically prepared by the audit team before the audit begins and is used to plan and allocate resources efficiently. It helps in estimating the time required for different audit procedures and ensures that the audit is completed within the expected timeframe.
The purpose of creating an audit time budget is to ensure that the audit process remains organized and efficient. It allows the audit team to manage their time effectively, avoid overworking, and identify any potential issues that may arise during the audit. By having a clear idea of how much time each step will take, the team can focus on the critical areas that require more attention and adjust their approach as needed.
The audit time budget also helps in managing client expectations. If certain steps take longer than expected, the audit team can communicate the delays and adjust the budget accordingly. It also helps in monitoring progress during the audit. If the time spent on each task deviates significantly from the original budget, the audit team can investigate the causes and take corrective actions.
In contrast, an audit strategy outlines the overall approach and objectives of the audit, including the scope, risk assessment, and methodology. An audit plan is more detailed and specifies the steps and procedures the audit team will follow, but it does not include specific time estimates for each task like the audit time budget does. Therefore, the audit time budget is the most accurate term for estimating the time required for each audit step.