Describe how you would plan the audit of a new client.
A core Audit & Assurance interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
ISA 300/315: (1) Engagement acceptance procedures (independence, capabilities, risk). (2) Understand the entity: industry, business model, IT systems, governance. (3) Determine materiality. (4) Identify risks of material misstatement. (5) Design the audit approach (substantive vs. combined). (6) Set the team and timeline. (7) Communicate with predecessor auditor (ISA 510).
WHAT INTERVIEWERS LISTEN FOR
- ✓Engagement acceptance procedures
- ✓Understand the entity
- ✓Determine materiality
- ✓Identify risks of material misstatement
- ✓Design audit approach
COMMON MISTAKES
- ✗Skipping engagement acceptance
- ✗Ignoring predecessor auditor communication
- ✗Not tailoring approach to new client
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