Title: Developing an Audit Plan for a Client: Understanding the Importance of Internal Controls and Risk Assessment

Scenario
As a junior associate for a CPA firm, you are asked to write a plan for a client about audit services. The services were mentioned in recent discussions with the client. A tour of the company’s plant would be the next step if your company is selected. The client understands financial securities but is not familiar with what an auditor does. The client has a passing knowledge of internal and external risks, the Sarbanes-Oxley Act, internal controls, and auditor tests, but does not understand how they all fit together to form an audit opinion.
Directions
Your task is to explain what these services include and why they are needed.
Specifically, you must address the following rubric criteria:
Outline the steps involved in developing audit plans.
Explain how you would develop an audit plan to provide a basis for expression of an audit option.
Describe why internal controls are part of understanding of the client.
Evaluate the client and their environment, including internal control.
Describe how an auditor obtains an assessment of risks.
Assess risks of material misstatement to design further audit procedures.
Explain what tests of financial statement accounts auditors perform.
Test financial statement accounts and balances, based on considerations of risks and internal controls.
What to Submit
Submit a 2- to 3-page written report as a Microsoft Word document with single spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style.