Problem 2 Planning the audit is essential for a obtaining sufficient, appropriate evidence b keeping costs reasonable to the client c avoiding a misunderstanding with a client Elaborate on each step below for the auditors objective in achieving the above essential elements Discuss in detail what each step consists of and give an example for each Accept the client and perform initial audit planning Understand the client's business and industry Assess client business risk Perform preliminary analytical procedures Set materiality levels and assess acceptable audit risk and inherent risk Understand internal control and assess control risk Gather information to assess fraud risks Develop overall audit plan and program

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Question: Problem 2 - Planning the audit is essential for a. obtaining sufficient, appropriate evidence b. keeping costs reasonable to the client c. avoiding a misunderstanding

Problem 2- Planning the audit is essential for a. obtaining sufficient, appropriate evidence b. keeping costs reasonable to the client c. avoiding a misunderstanding with a client. Elaborate on each step below for the auditors objective in achieving the above essential elements. Discuss in detail what each step consists of and give an example for each.

Accept the client and perform initial audit planning
Understand the client's business and industry
Assess client business risk
Perform preliminary analytical procedures
Set materiality levels and assess acceptable audit risk and inherent risk
Understand internal control and assess control risk
Gather information to assess fraud risks
Develop overall audit plan and program

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