Laney and Derek are discussing the audit of Parker Enterprises, which is soon to begin. Laney would like to get an idea of the first steps they should take as part of the audit. Derek, a more experienced auditor advises Laney that one of the first things they will do is
A.conduct a 'what can go wrong' analysis to determine where areas with increased fraud and error risk may be.
B.look at Parker Enterprises competitors, so they can determine where financial statement misstatements have occurred. Have senior management sign written assurances that there are no misstatements in the financial statements, in order for a clean audit opinion to be issued.
C.conduct a 'where did it go wrong' analysis to determine what errors and inconsistencies existed during the external audit