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  3. (a) gaining an understanding of the business of a

(a) Gaining an understanding of the business of a client, and the environment in which...

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Accounting

(a) Gaining an understanding of the business of a client, and the environment in which it operates is a crucial part of the audit planning process. ISA 315(revised) Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment provides guidance on this matter. The issue is that the auditor must have a thorough understanding of many aspects of the client's business and environment to be able to assess risk, decide on an appropriate audit strategy, and be able to design and perform effective audit procedures.
Required:
In point form, identify and explain FIVE main aspects of a client's business which should be considered to gain an understanding of the company and its operating environment
(10 marks)
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