Question - Please keep your answers down to at least one paragraph, this is the conversation not an essay question.
1. One purpose of performing analytical procedures in the planning phase of an audit is to assess the client's financial condition. How does the assessment of a client's financial condition affect the auditor's decisions concerning evidence accumulation in later phases of the audit?
2. There are four important purposes of analytical procedures. Identify one of these four purposes and give a specific example of an analytical procedure that an auditor might perform.
3. What factors should an auditor consider before accepting a company as a new audit client? Why might an auditor not wish to continue a relationship with an existing audit client?