It is essential that all members of the audit team fully understand the client’s industry, business and organization. This is so because:
ISA 250 “Consideration of laws and regulations in an audit of Financial Statement” states that it the responsibility of management, with the oversight of Those Charged With Governance, to ensure that the entity’s operation are conducted in accordance with the provisions of laws and regulations.
Agreed upon procedure is an engagement where the client specifies procedures and the accountant agree to perform those procedures. An accountant may accept an engagement to apply agreed- upon procedures to financial Statement elements, where the scope of engagement is not sufficient to express an opinion, If the user assumes responsibility for sufficiency of the procedures, and the use of report is restricted to specified users.
ISA 520 Analytical Procedures requires that the auditor performs analytical procedures during the initial risk assessment stage of the audit. These procedures, also known as preliminary analytical review, are usually performed before the year-end, as part of the planning of the final audit.