The First Step in IS Audit Planning

D.

When planning an IS audit, the first thing that should be reviewed is option D, the business environment.

The business environment includes factors such as the organization's mission, goals, and objectives, the nature of its operations, the regulatory and legal environment, the industry and market conditions, and the competitive landscape. By reviewing the business environment first, the auditor gains an understanding of the context within which the information systems operate and the risks that may impact the organization's ability to achieve its objectives.

Understanding the business environment is critical in determining the scope of the audit, identifying the key risks and controls, and developing an effective audit plan. It also helps the auditor to prioritize the audit activities and allocate the necessary resources.

Once the auditor has a good understanding of the business environment, he or she can then review the IS audit standards (option C) to ensure that the audit is conducted in accordance with the generally accepted best practices and standards. Reviewing the recent financial information (option A) and the annual business unit budget (option B) may be relevant to the audit, but these should not be the primary focus when planning the audit.

In summary, reviewing the business environment should be the first step when planning an IS audit. This provides a solid foundation for the audit and helps to ensure that the audit is relevant and adds value to the organization.