Question

Please assist me- auditing and investigagtion

The first four parts of audit planning:

1. Accept client and perform initial audit planning
2. Understand the client’s business and industry
3. Perform preliminary analytical procedures
4. Set preliminary judgement of materiality and performance materiality

The following are various activities an auditor does during audit planning. For each audit procedure indicate which of the first four parts of audit planning above it relates to

BEHIND EACH OF THE FOLLOWING IDENTIFY THE AUDIT PLAN PART EG PART 1 , PART 2 PART 3 , PART 4

   1.      Review accounting principles unique to the client’s industry.

2.       Determine the likely users of the financial statements.

3.      Evaluate the appropriate financial statement measures for determining amounts

            likely to be considered material by users of the financial statements.

  4.       Identify whether any specialists are required for the engagement

5.        Send an engagement letter to the client.

6.        Tour the client’s plant and offices

7.        Compare key ratios for the company to industry competitors.

Answer 1

Solution:-

1. Review accounting principles unique to the client’s industry.-Answer-Part 2 i.e. understand the client's business and industry.

2. Determine the likely users of the financial statements- Answer- Part 1 i.e.accept client and perform initial audit planning

3. Evaluate the appropriate financial statement measures for determining amounts likely to be considered material by users of the financial statements.- Answer- Part 4 i.e set preliminary judgement about materiality and performance materiality.

  4. Identify whether any specialists are required for the engagement- Answer- PArt 1 i.e. accept client and perform initial audit planning

5. Send an engagement letter to the client.- Answer- PArt 1 i.e. accept client and perform initial audit planning

6.Tour the client’s plant and offices- Answer- PArt 2 i.e. understand the client's business and industry

7.Compare key ratios for the company to industry competitors.-Answer- Part 4 i.e set preliminary judgement about materiality and performance materiality.