Lesson: Understanding the Engagement and the Client

In this lesson, obtaining an understanding of the entity, its environment, and internal control processes are discussed. Walkthroughs and client calls play an essential part in audit planning, which is an ongoing, iterative process. Additionally, the importance of continually assessing audit planning every year is emphasized. Auditors must plan their audits responsively based on the risk of material misstatement and revise the overall strategy if disconfirming evidence is obtained. It's worth noting that various factors, such as global events, recessions, or changes in the client's business, can significantly influence audit planning.