1. List three matters the auditor must carefully evaluate before accepting an audit engagement 2. Explain briefly why it is necessary for an auditor to investigate the integrity of a (prospective) client's management before accepting an audit engagement. 3. Explain briefly the factors auditors should consider before concluding they are competent to accept a particular audit engagement. 4. (a) Explain briefly the purpose of a proposed auditor communicating with the predecessor auditor; and (b) list three matters about which the proposed auditor should seek information. 5. (a) Explain briefly the purpose of audit engagement letters; and (b) list five items which are almost invariably included in such letters.

6. Explain briefly the importance of an auditor gaining a thorough understanding of the client, its business operations, its risks, its industry, and its financial and non-financial performance. 7. List (a) five external environmental factors and (b) five internal environmental factors which are likely to affect an entity and its external audit. 8. Explain briefly the importance of each of the following as risk assessment procedures: (i) touring the client's premises; (ii) reading trade journals and magazines; (iii) reviewing the client's documentation; (iv) reviewing prior years' audit working papers and drawing on past experience with the client; (v) discussion among engagement team members. 9. (a) Briefly explain the meaning of the term 'analytical procedures'; and (b) outline three ways in which these procedures are used during an audit. 10. List four ways in which analytical procedures can assist the auditor during the initial (risk assessment) stage of an audit.