Verifying compliance with independence requirements. Formal acceptance of the client by the firm. Performing procedures to determine applicable financial reporting framework & accounting policies, nature, timing, and extent of procedures needed in order to conduct the audit.

Understanding the entity business, industry and the environment in which the entity operates (competitors, customers, suppliers and regulators) to identify and assess the risks that could lead to a material misstatement in the financial statements.

Developing an audit strategy & plan to address the risks discovered in the assessment, includes designing a testing approach, deciding the degree of reliance on the entity’s internal controls, developing a detailed timetable, and allocating tasks to the audit team.
The audit strategy & plan is continually reassessed throughout the audit and adjusted to respond to new information.

Substantive testing & analytical review includes: Examining, sampling and, recalculation records, Physically observing & inspecting assets (inventory, property, and equipment), Obtaining confirmations from third-parties (suppliers, customers, and banks), and Comparison elements of the financial statements to relevant external information and investigating differences;

Once the auditor has completed all procedures for each audit objective and gathered sufficient evidence to reach a conclusion on the fairness of the financial statements, an audit report is drafted with the corresponding audit opinion.