The purpose and objective of an auditor is to form opinions on whether the operations of an entity are effective and efficient and if financial statements are reliable and do not contain any material misstatements. Once an audit is accepted by an auditor they will need to gather evidence that is sufficient and reliable which will support any opinions that are made by the auditor. The audit process is a logical and systematic process which is planned and implemented in accordance to the audit standards. 4.1 Prior to the audit conducting an audit there are stages which need to be followed. What are these stages? (4 marks) 4.2 There are two requirements which should be fulfilled prior to the acceptance of an engagement which is to establish if the pre-conditions of the audit exist and ensuring that there is a mutual understanding which is present between management, the auditor and individuals who are in charge of governance of the audit engagement. What are the TWO (2) pre-conditions of an audit? ( 4 marks) 4.3 The audit plan consists of a greater amount of details as compared to the audit strategy. Identify TWO (2) items which should be documented in the audit plan. ( 2 marks) QUESTION 5 (20 Marks) The statements that follow are with regard to evidence that is sufficient and appropriate. As a future auditor, you are required to indicate if you agree with each statement and provide reasons for your decisions: 5.1 An auditor can only properly measure the appropriateness and sufficiency of audit evidence that will be used when expressing opinions are by utilising statistical sampling method only when they are gathering evidence. (5 marks) 5.2 The conduction of an audit in prior years for an entity will not have any influence when the auditor is determining if the evidence gathered is sufficient and appropriate for the current audit. (5 marks) 5.3 The level of professional scepticism that the auditor possesses is a factor that that has an influence on the appropriateness and sufficiency of audit evidence. (5 marks) 5.4 When the auditor is making a decision on whether or not sufficient and appropriate evidence has been obtained they will first need to make considerations regarding the sufficiency of the evidence gathered