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preliminary analytical procedures

1. Discuss how you would perform preliminary analytical procedures and recommend ways to mitigate engagement risk and audit risk.

2. Analyze elements of the audit planning process and explain how you would prepare an audit program.

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1. Discuss how you would perform preliminary analytical procedures and recommend ways to mitigate engagement risk and audit risk.
Preliminary procedures that I would perform to make recommendations to mitigate engagement risk and audit risk would be to identify those activities that need to be audited, evaluate the audit risk factors, judge the importance of the different factors, and classify the risks.
For the purpose of identifying he auditable activities, I would consider the policies of the organization, the financial statements, the methods used for activities like sales, collection and purchasing. The currently used system of information, the balances of ledgers and applicable law would also be examined by me.
I would endeavor to identify the risk factors by making a preliminary assessment of the asset size, transaction volume, the volatility of the organization's activities, the interest of the management, the organizational changes, the abilities and qualifications of the personnel, computerization of accounts and the effectiveness of the internal controls.
There are several suggestions given in the ISA315 to make a preliminary assessment of audit risk. These include, assessment of published financial results, inspection of internal documents, making charts and tables to understand the current situation, making inquiries from the employees ...

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