What might auditors need to do if an issue is frequent or severe?

What might auditors need to do if an issue is frequent or severe?

• A. Ignore it if it does not affect other audits
• B. Decrease the sample size for efficiency
• C. Increase sample size or expand the audit scope
• D. Consult with clients before making recommendations

Answer: (C)

When auditors encounter an issue that is frequent or severe, increasing the sample size or expanding the audit scope is a necessary response. This approach serves several important purposes. First, a larger sample size provides a more comprehensive understanding of the severity and frequency of the issue, allowing auditors to assess its impact more accurately. This can help identify patterns or systemic problems that may not be evident from a smaller sample. Second, expanding the audit scope can lead to the discovery of additional relevant information that may be critical for a thorough evaluation. This is crucial in cases where the underlying issue could potentially have broader implications for the organization, such as compliance risks, financial reporting accuracy, or operational effectiveness. By taking these actions, auditors ensure that they are not overlooking significant problems and are providing appropriate recommendations based on a well-rounded analysis of the circumstances. In essence, these steps are integral to maintaining the integrity of the audit process and ensuring that auditors fulfill their responsibility to identify and address any material risks or concerns.

When auditors encounter an issue that is frequent or severe, increasing the sample size or expanding the audit scope is a necessary response. This approach serves several important purposes. First, a larger sample size provides a more comprehensive understanding of the severity and frequency of the issue, allowing auditors to assess its impact more accurately. This can help identify patterns or systemic problems that may not be evident from a smaller sample.

Second, expanding the audit scope can lead to the discovery of additional relevant information that may be critical for a thorough evaluation. This is crucial in cases where the underlying issue could potentially have broader implications for the organization, such as compliance risks, financial reporting accuracy, or operational effectiveness.

By taking these actions, auditors ensure that they are not overlooking significant problems and are providing appropriate recommendations based on a well-rounded analysis of the circumstances. In essence, these steps are integral to maintaining the integrity of the audit process and ensuring that auditors fulfill their responsibility to identify and address any material risks or concerns.