AP5.9 (LO 1, 2, 3) Gathering evidence Max Crowe is an associate auditor who has just started with the team conducting the audit of a new client in the construction industry. Max is shadowing Susan Wong, an experienced auditor. Susan is showing Max how to be a member of an audit team and is trying to teach Max about the benefits of getting to know the client. Susan is also trying to help Max develop experience in picking up subtle signals about the clients problems and what the client might be trying to hide from the auditor.

Max is getting a little frustrated with the shadowing assignment. He cannot understand why Susan is spending so much time talking to the clients staff and touring the various construction sites and offices. When Susan is not doing this, she is working on a spreadsheet of the clients previous financial statements and unaudited interim data. Max wants to know when they are going to do some real work and start gathering audit evidence. Susan tells Max that they have already started.

Required

1. a. Discuss Susans comment that they have already started the audit. What evidence have they gathered so far?
2. b. Explain what work is being done with the spreadsheets of financial data. Give some specific examples for this client. How is this type of work relevant to different phases of the audit?
3. c. When Susan is touring the clients premises, she is taking notes of equipment and furniture she sees, especially anything that looks either newly purchased or older and unused. Explain why she is doing this.