Which statement is always true about planning a year-end examination?

• A. An engagement proposed after the fiscal year ends should not accepted.
• B. An inventory count must be observed at the balance sheet date
• C. The client's audit committee should not be told of the specific audit procedures that will be performed.
• D. It is an acceptable practice to carry out substantial parts of the examination at interim dates

Answer: (D)

In planning a year-end audit, it’s standard to schedule substantial testing for interim dates. Doing so lets you gather a lot of evidence early, spread the workload, and focus on areas that are less likely to change dramatically by year end. Importantly, this doesn’t replace the need for year-end procedures—you still verify year-end balances and consider events after the interim dates to ensure the financial statements are complete and accurate.

Other statements aren’t universally true. Engaging an audit after the fiscal year ends is a normal part of audit planning, so it isn’t correct to say it shouldn’t be accepted. Inventory counts don’t have to be observed exactly on the balance sheet date; counts can be performed before or after with proper cut-off testing. And it’s appropriate to inform those charged with governance about the planned procedures; withholding that information isn’t correct.

So, carrying out substantial parts of the examination at interim dates is an acceptable practice.