During inquiry of the predecessor auditor and other professionals the senior partner learns that BBC has just been engaged to construct an oil pipeline across environmentally sensitive land. The client is a major oil company, and all required permits have apparently been obtained. The partner wants to ensure that the audit complies with all professional standards on understanding the industry, regulatory, and other external factors. Draft a memo (no title page) to Mr. Hawkins explaining what should be included in the auditor's understanding of industry, regulatory, and other external factors. For each key item, explain why the understanding is relevant to the audit. To: Robert Hawkins, Senior Partner Re: Factors that influence the reliability of confirmations