DISCUSSION QUESTIONS AND PROBLEMS -28 (OBJECTIVES 81.83,84,8-5) The following are various activities an auditor does during udit planning. I. Decide whether to accept a new client or continue serving an existing one. 2 Identify why the client wants or needs an audit. 1 Obtain an understanding with the client about the terms of the engagement in order to avoid misunderstandings. 4. Identify whether any specialists are required for the engagement. s. Compares client ratios to industry or competitor benchmarks to provide an indication of the company's performance 6. Tour the client's plant and offices. 7. Specify materiality levels to be used in testing of accounts receivable. s Compare key ratios for the company to those for industry competitors. 9. Develop an overall strategy for the audit, including engagement staffing and any required audit specialists. 10. Prepare common-size financial statements for one or more years that displayall items as a percent of a common base, such as sales. For each audit procedure, indicate which of the first four parts of audit planning the proce. dure primarily relates to: (1) accept client and perform initial audit planning: (2) understand the client's business and industry: (3) perform preliminary analytical procedures: (4) set preliminary judgment about materiality and performance materiality Required u's financial state