Each Numbered Item Below Indicates One Action an Auditor Might

Each numbered item below indicates one action an auditor might take as part of a financial statement audit.Which of the two lettered alternatives would be the immediate next step based on the five generic financial statement audit steps presented in the text?
1) Ask employees about the ethical tone management sets in the organization.
a.Prepare a risk/control matrix.
b.Examine the CEO's resume.2) Discuss the educational background of each member of the upper management team.
a.Outline the client's risk exposures.
b.Verify balances in accounts receivable.3) Determine if adequate separation of duties exists.
a.Prepare a systems flowchart of the sales/collection process.
b.Compute depreciation on plant assets.4) Choose transactions to verify as part of the audit.
a.Question management about their knowledge of COSO models.
b.Issue an audit report.5) Examine a systems flowchart to determine who reconciles the bank statement.
a.Verify that business processes are adequately documented.
b.Reconcile the latest bank statement.