Discuss briefly the following statements

(in doing this, try to go beyond the text of this chapter and use your imagination to explore the statement):

(a) Audit risk is the risk that control systems will not detect material misstatements in the financial statements subject to audit.

(b) Cumulative client knowledge enables the auditor to be more efficient and aids effectiveness in the audit process.

Explain what you understand by cumulative client knowledge. Ask yourself what information about an organization would be useful to you on a permanent basis.

(c) The letter of engagement is of little value, as most clients will not understand what it means.