(TCO G) Conducting an

  

(TCO
G) Conducting an audit in accordance with Generally Accepted Auditing
Standards requires that the audit is properly planned, performing
preliminary upfront analytical procedures, assessing the clients
business risk and making sure that the auditors understand the client’s
business and industry.  (a)  Identify and describe at least three aspects of proper audit planning and why they are important.(b)
Define what an analytical procedure is and  give at least three
procedures that should be performed and their purpose.  For example,
comparison of last year’s Allowance for Doubtful Accounts to this year’s
Allowance for Doubtful accounts – the amount has decreased by 25%,
while sales have increased by 10% from last year.  How might this affect
how you look at Accounts Receivables and the related Allowance for
Doubtful Accounts?  Would you increase or decrease your audit
procedures?(c) Why does an auditor need to understand the client’s
business and their industry?  Provide an industry and what risks may
that industry pose to our client.

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