The audit plan contributes to the efficiency of the audit and helps to increase the audit risk to an acceptably low level.Group of answer choicesTrueFalse

Understanding the Statement

The statement suggests that an audit plan enhances the efficiency of the audit process while simultaneously lowering audit risk to an acceptable level. To determine whether the statement is true or false, we need to analyze the roles of an audit plan in the audit process.

Analysis

1. Audit Plan's Role: An audit plan outlines the audit strategy, including the objectives of the audit, the scope, the timing, and the necessary resources. A well-structured audit plan helps auditors conduct a thorough examination efficiently.

2. Efficiency of Audit: With a clear plan, auditors can allocate their time and resources more effectively, minimizing redundancies and ensuring all necessary areas are covered within the specified time.

3. Audit Risk: Audit risk is the risk that auditors may issue an incorrect opinion on financial statements. The audit plan aims to assess and mitigate this risk by identifying areas of significant risk and determining the appropriate audit procedures to address these risks.

4. Overall Conclusion: A comprehensive audit plan indeed enhances efficiency and helps manage and reduce audit risk. Therefore, the assertion made in the statement is accurate.

Final Answer

True: The audit plan contributes to the efficiency of the audit and helps to increase the audit risk to an acceptably low level.