To prepare an audit strategy and an audit plan, the Auditor will need to gain an understanding of the entity and its environment in accordance with ISA 315 “Identifying and assessing the risk and material misstatement through understanding the entity and its environment”.
Required:
i) State FIVE (5) sources from which the Auditor can obtain knowledge of the industry and the organisation. (5 marks)
View Solution
- Communication with previous Auditors
- The clients most recent annual accounts
- Other business publications of the client.
- Press report on the clients’ activities
- Credit rating from client rating agencies.
- Reference from existing clients
- Previous knowledge of the clients’ industry
- Interaction with client management and staff
(Any 5 points @ 1 mark each = 5 marks)