As 2110 provides the following guidance regarding the auditors need to obtain an understanding of companys selection and application of accounting principle.

As part of obtaining and understanding of the companys selection and application of accounting principles, including related disclosures, the auditor should evaluate whether the companys selection and application of accounting principles are appropriate for its business and consistent with applicable financial reporting framework and accounting principles used in the relevant industry, Also, to identify and assess risks of material misstatement related to omitted, incomplete, or inaccurate disclosures, the auditor should develop expectations about the disclosures that are necessary for the companys financial statements to be presented fairly in conformity with the applicable financial reporting framework.