The auditee determines the audit objectives.

The statement that the auditee determines the audit objectives is false because the audit objectives are typically established by the auditor or the auditing organization, not solely by the auditee. The audit objectives are designed to adhere to the scope of the audit and align with relevant standards, regulations, and the goals of the organization conducting the audit. This ensures that the audit process is aligned with the organization's overall compliance and risk management strategies.

While input from the auditee is important in understanding the context and specifics of the area being audited, the responsibility for determining the audit objectives generally lies with the audit team. This approach guarantees objectivity and independence in the audit process, which is crucial for credible outcomes. If auditees were to define the audit objectives themselves, there could be a conflict of interest, and the audit could lack impartiality, potentially undermining its effectiveness.

In summary, the auditing process relies on a structured framework where objectives are defined by the auditors to maintain integrity and independence, which is essential for an effective audit.