8

During the early stages of the audit of Margate Company, the auditors are examining the client's revenue accounts and attempting to develop an expectation of what might go wrong in this area. Which of the following represents the best method of achieving this? The auditors should perform an industry analysis using statistical regression techniques to develop a forecast of the client's expected revenues for comparison purposes. The auditors should carefully examine the client's customers, marketplace standing, and the size/capacity of the client. The auditors should obtain written assurances from senior management pertaining to what has gone wrong in this area