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Assr Aa STF New l2 Pm2.4 Client Background Info

The client is a private company that sells consumer goods, with its main office located in North America. It uses SAP as its IT system. Key executives and the board are not identified. The majority of sales come from North America, with fiscal year end in December. The period under audit is the year ended December 31. Top competitors are also not named. Planning materiality is $X million, tolerable error is $Y million, and the SAD nominal amount is $Z million. The ASM and SRM documents provide background on the client, prior year issues, and risk assessment. The UTB and InfoGator report include current year financial information and risks.

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81 views3 pages

Assr Aa STF New l2 Pm2.4 Client Background Info

The client is a private company that sells consumer goods, with its main office located in North America. It uses SAP as its IT system. Key executives and the board are not identified. The majority of sales come from North America, with fiscal year end in December. The period under audit is the year ended December 31. Top competitors are also not named. Planning materiality is $X million, tolerable error is $Y million, and the SAD nominal amount is $Z million. The ASM and SRM documents provide background on the client, prior year issues, and risk assessment. The UTB and InfoGator report include current year financial information and risks.

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Personal Account
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Participant Material 2.

4: Assigned to a Client

Client background information


Instructions:
Familiarize yourself with the client by reviewing the documentation that has been completed in the initial
planning and identify and assess risks phases of the audit. You have 30 minutes to complete this exercise.

Review the following:


► Current year UTB
► Current year ASM
► Current year InfoGator report
► Financial statement extract
► Trial balance
► Prior year SRM
► Determine PM, TE and SAD nominal amount task in Canvas
► Accounts summary in Canvas
► EDAP Minutes for the Scope & Strategy phase, including:
o 3.1 - Discuss and approve PM, TE and SAD nominal amount;
o 3.2 - Discuss the risks of material misstatement and approve identified significant risks
(including fraud risks); (Not provided for learning purposes)
o 3.3 - Discuss and approve significant accounts and disclosures;
o 3.4 - Discuss and approve identified significant classes of transactions (SCOTs); (Not
provided for learning purposes)
o 3.5 - Discuss and approve the audit strategy for each SCOT; (Not provided for learning
purposes)
o 3.6 - Discuss and approve the CRA; (Not provided for learning purposes)
o 3.7 - Discuss and approve our planned responses to the identified significant risks
(including fraud risks) and higher risk estimates; (Not provided for learning purposes);
o 3.9 - Discuss and approve the items we plan to bring to the attention of those charged
with governance. (Not provided for learning purposes)

Please note all key areas to review for this activity are in red text in the ASM/UTB and SRM documents.

Based on the information included in the documents and Canvas screens listed, provide responses to the
questions listed below.

Client background information:


► Is the Company public or private?
► What does the Company sell?

Page 1 of 3 The Audit Academy


© 2021 EYGM Limited Expedition: Audit
PM 2.4: Assigned to a Client

► Where is the main office located?


► Who are the Company’s key executives and board?
► What country accounts for the majority of the Company’s sales?
► When is the Company’s fiscal year end?
► What is the period under audit?
► Who are the Company’s top competitors?
► Financial overview: what are the Total Assets, Total Liabilities, Sales and Profit amounts for the
year?
► What IT system does the Company use?
► What is the planning materiality, tolerable error and the SAD nominal amount of the Company?
► How many accounts are designated as limited risk accounts for the Company?

In addition, while reviewing the documents listed above, identify and document any key information or
significant accounting issues that you think would impact the current year’s audit.

AUDIT STRATEGIES MEMORANDUM (ASM) AND EDAP MINUTES

PRIOR YEAR SUMMARY REVIEW MEMORANDUM (SRM)

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© 2021 EYGM Limited Expedition: Audit
PM 2.4: Assigned to a Client

CURRENT YEAR UTB AND INFOGATOR REPORT

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© 2021 EYGM Limited Expedition: Audit

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