Below are various activities an auditor does during audit planning. Requirement For each procedure, indicate which of the first four parts of audit planning the procedure primarily relates to. Assess activities 1. through 5. in this step and then assess activities 6. through 10. in the following step. Activity Stage of Planning Decide whether to accept a new client or 1. continue working for an existing one 2. Identify why the client requires an audit Discuss the terms of the engagement with the 3. client in order to avoid misunderstandings Identify whether any specialists are required for the engagement Compare client ratios to industry or competitor standards to gain a sense of the company's 5. performance 4 (1) Accept client and perform initial audit planning (2) Understand the client's business and industry (3) Perform preliminary analytical procedures (4) Set preliminary judgment about materiality and performance materiality