What is the primary purpose of walkthroughs in an audit?

The primary purpose of walkthroughs in an audit is to establish the existence of internal controls. Walkthroughs involve tracing a transaction through the various stages of processing, which allows auditors to understand how transactions are processed and identify the controls in place at each stage. During a walkthrough, auditors interact with key personnel and review documentation to gain insights into the design and implementation of controls within the client’s system.

Establishing the existence of internal controls is crucial because it lays the foundation for assessing whether those controls are effective in achieving their intended purpose. This understanding helps auditors determine the risk of material misstatement in financial statements and informs the overall audit strategy.

While other options represent important aspects of an audit process, they do not capture the main objective of walkthroughs. For instance, collecting definitive audit evidence is more closely associated with procedures such as substantive testing, and testing the operating effectiveness of controls typically comes after establishing their existence, utilizing more targeted tests. Finalizing the audit approach is a broader task that encompasses various planning activities rather than the specific aim of conducting walkthroughs.