Student_ACC_421_Chapter_8_outline - 3 Indicate possible...

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ACC 421 Chapter Eight Outline I. Purpose and methodology of audit planning A. Initial audit planning 1. Client acceptance and continuance 2. Obtain an understanding with the client 3. Develop audit strategy B. Understand the client’s business and industry 1. Industry and external environment 2. Business operations and processes 3. Management and governance C. Assess client business risk D. Perform preliminary analytical procedures 1. Understand the client’s industry and business 2. Assess going concern
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Unformatted text preview: 3. Indicate possible misstatements 4. Reduce detailed tests II. Analytical procedures A. Compare client and industry data B. Compare client data with similar prior-period data 1. Compare current year balance with that of previous year 2. Compare the detail of a total balance with detail from the previous year 3. Compute ratios and percent relationships for comparison with previous years 4. Compare client data with auditor-determined expected results...
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