Auditing - What are Pre-engagement Activities

The video outlines steps audit firms take before audits to manage risk and evaluate clients. Key activities include communicating with predecessor auditors, reviewing financial information, assessing risk and special skills, ensuring independence, and obtaining engagement letters. These steps help auditors objectively evaluate clients and prepare for audits effectively.

What is one of the initial activities firms undertake when evaluating new clients?

• Assessing the client's customer satisfaction

• Analyzing the client's product lines

• Communicating with the predecessor auditor

• Reviewing the client's marketing strategies

Which type of information is crucial for auditors to review during the audit process?

• Company's social media presence

• Company's advertising campaigns

• Company's financial and regulatory filings

• Company's employee satisfaction surveys

Why might an auditor need to consider the need for special skills during an audit?

• To enhance the company's sales performance

• To improve the company's public image

• To ensure compliance with marketing standards

• To address specific industry requirements

What is a key factor auditors must ensure to maintain objectivity during an audit?

• Their independence from the client

• Their knowledge of the client's marketing strategies

• Their familiarity with the client's products

• Their relationship with the client's competitors

What is an important document that must be obtained for both new and continuing clients?

• A customer feedback form

• An engagement letter

• A financial report

• A marketing agreement