An auditor obtains knowledge of an audit clients business and its industry in order to:

(a) Develop an attitude of professional scepticism concerning managements financial statement assertions.

(b) Make constructive suggestions concerning improvements in the clients internal control.

(c) Understand the events and transactions that may have an effect on the financial statements.

(d) Evaluate whether the aggregation of known misstatements causes the financial statements taken as a whole to be materially misstated.

Discuss each of (a)(d) individually in explaining why, or why not, it explains why an auditor obtains knowledge of a new clients business and its industry.