An auditor performs various procedures during audit planning. For each procedure, indicate which of the first four parts of audit planning the procedure primarily relates to: (1) accept the client and perform initial audit planning; (2) understand the client's business and industry; (3) assess the client's business risk; (4) perform preliminary analytical procedures.
Audit Planning Activities and Procedures
Determine the likely users of the financial statements.
Identify whether any specialists are required for the engagement.
Send an engagement letter to the client.
Tour the client's plant and offices.
Compare key ratios for the company to those for industry competitors.
Review management's risk management controls and procedures.
Review accounting principles unique to the client's industry.
Identify potential related parties that may require disclosure.