| 11. | The auditor shall obtain an understanding of the following: |
| (a) | Relevant industry, regulatory, and other external factors including the applicable financial reporting framework. (Ref: Para. A17-A22) |
| (b) | The nature of the entity, including: |
| (i) | its operations; |
| (ii) | its ownership and governance structures; |
| (iii) | the types of investments that the entity is making and plans to make, including investments in special-purpose entities; and |
| (iv) | the way that the entity is structured and how it is financed |
| to enable the auditor to understand the classes of transactions, account balances, and disclosures to be expected in the financial statements. (Ref: Para. A23-A27) |
| (c) | The entity's selection and application of accounting policies, including the reasons for changes thereto. The auditor shall evaluate whether the entity's accounting policies are appropriate for its business and consistent with the applicable financial reporting framework and accounting policies used in the relevant industry. (Ref: Para. A28) |
| (d) | The entity's objectives and strategies, and those related business risks that may result in risks of material misstatement. (Ref: Para. A29-A35) |
| (e) | The measurement and review of the entity's financial performance. (Ref: Para. A36-A41) |
|
|
Licence and copyright | © 2018, LexisNexis Group a division of Reed Elsevier (UK) Ltd. All rights reserved. |