The following are various activities an auditor doesduring audit planning.1. Determine the likely users of the financial statements.2. Identify whether any specialists are required for the engagement.3. Send an engagement letter to the client.4. Tour the client’s plant and offices.5. Compare key ratios for the company to those for industry competitors.6. Review management’s risk management controls and procedures.7. Review accounting principles unique to the client’s industry.8. Identify potential related parties that may require disclosure.For each procedure, indicate which of the first four parts of audit planning the procedureprimarily relates to: (1) accept client and perform initial audit planning; (2) understandthe client’s business and industry; (3) assess client business risk; (4) perform preliminaryanalytical procedures.
The following are various activities an auditor does
during audit planning.
1. Determine the likely users of the financial statements.
2. Identify whether any specialists are required for the engagement.
3. Send an engagement letter to the client.
4. Tour the client’s plant and offices.
5. Compare key ratios for the company to those for industry competitors.
6. Review management’s risk management controls and procedures.
7. Review accounting principles unique to the client’s industry.
8. Identify potential related parties that may require disclosure.
For each procedure, indicate which of the first four parts of audit planning the procedure
primarily relates to: (1) accept client and perform initial audit planning; (2) understand
the client’s business and industry; (3) assess client business risk; (4) perform preliminary
analytical procedures.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
