For now it is sufficient to say that, as part of the
initial planning process, it is important that the planner obtains reasonable
problem areas at which audit work
initial planning process, it is important that the planner obtains reasonable
problem areas at which audit work
Apart from discussions with management, etc. one
way of doing this is by carrying out a preliminary analytical review of the
latest management accounts.
way of doing this is by carrying out a preliminary analytical review of the
latest management accounts.
Analysis of key ratios, for example, gross profit
%, net profit %, stock turn, debtor and creditor days, liquidity and quick
ratios, etc, can give an indication of possible problem areas, which can be
discussed further with management and investigated. It also aids the planner’s
understanding of the client and its activities.
%, net profit %, stock turn, debtor and creditor days, liquidity and quick
ratios, etc, can give an indication of possible problem areas, which can be
discussed further with management and investigated. It also aids the planner’s
understanding of the client and its activities.