Prepare a broad audit plan: Pegasus Airlines

a.     What material types of transactions and transaction cycles are involved?

b.     What are the high-risk areas? Would you consider any of these risks to be significant risks?

c.     What are the low-risk areas?

d.     If management faced tremendous pressure regarding the entity’s financial performance, what opportunities might exist for them to engage in fraudulent financial reporting?

e.     To what extent do you believe it will be appropriate to reduce assessed control risk?

f.      How will audit effort be allocated among geographical areas?

 g.        What form of audit report do you expect will be issued; what does it mean?