Suppose that you are audit senior in an accounting firm. Your firm has recently won an audit for a company ELDERS ltd. Thus, your firm does not have any other clients that operate in this industry. Your audit partner is concerned about his lack of knowledge of the industry the company is operating in. He is aware of the needs of ASA 315.
Your audit partner asks you to prepare a memo on the ‘state of the company's industry' and associated risk factors.
Required:
a) Prepare a list of all useful sources that you will use to obtain the required knowledge.
b) Prepare a memo to the audit partner on the ‘state of the company's industry' and associated risk factors.
c) Suggested five most important basic balance-related or transaction-related audit objectives based on your finding of the risk factors.