审计学(英) 课件 第八章.ppt

Understand the Client’s Business and Industry Figure 8-3 in p.179: Strategic systems understanding of the client’s business and industry. Understand the Client’s Business and Industry Industry and external environment. Business operations and processes. Management and governance. Objectives and strategies. Measurement and performance. Understand the Client’s Business and Industry Industry and external environment. Three primary reasons: Risks associated with specific industries may affect the auditor’s assessment of client business risk and acceptable audit risk and may even influence auditors against accepting engagements in riskier industries. Understand the Client’s Business and Industry Industry and external environment. Three primary reasons: Certain inherent risks are common to all clients in certain industries. Many industries have unique accounting requirements. Understand the Client’s Business and Industry Business Operations and Processes. The auditor should understand factors such as major sources of revenue, key customers and suppliers, sources of financing, and information about related parties that may indicate areas of increased client business risk. Understand the Client’s Business and Industry Business Operations and Processes. Tour the plant and offices. Observe operations firsthand and meet key personnel. Discussions with nonaccounting employees. Identify inherent risk. Understand the Client’s Business and Industry Business Operations and Processes. Identify related parties. Transactions with related parties are important to auditors because accounting standards require that they be disclosed in the financial statements if they are material. Understand the Client’s Business and Industry Business Operations and Processes. Identify related parties. A related party is defined as an affiliated company, a principal owner of the client company, or any other party with which the client deals