What is the primary purpose of a preliminary audit?

The primary purpose of a preliminary audit is to assess the readiness of financial data and the scope of the planned audit. This initial phase is crucial as it allows auditors to become familiar with the organization's financial processes and systems, identify any potential issues or areas of concern, and determine the necessary depth and focus of the upcoming audit. By evaluating the financial data's accuracy and completeness beforehand, auditors can identify risks and complexities that may impact the audit process.

This preparatory step also enhances the efficiency and effectiveness of the audit by allowing auditors to tailor their approach based on the findings from the preliminary audit. It creates a foundation for a well-structured and focused audit that aims to generate reliable and valid conclusions regarding the organization's financial health.