Which of the following provides the best method of obtaining an understanding of a continuing client's business for planning an audit?

Question

Quizplus · Accepted Answer

Reviewing prior year audit documentation and the permanent file for the client provides the auditor with knowledge of the client’s business, the industry, and any risks or issues identified during prior audits. This information can be used to tailor the audit approach for the current year or identify areas of potential fraud or errors. However, this should be complemented with updated information from other sources, such as discussions with management and reevaluating the client’s internal control environment. Performing tests of details of transactions and balances and reading specialized industry journals can provide additional information but may not necessarily provide the best understanding of the client’s specific business.

Which of the Following Provides the Best Method of Obtaining