ACCA Audit and Assurance (F8) Practice Exam

What are good sources of information for new clients?

1. Enquiries to local businesses

2. Media coverage

3. Previous auditors

4. All of the above

The correct answer is: Previous auditors

When considering sources of information for new clients, previous auditors provide valuable insights. They have firsthand knowledge of the client's business operations, internal controls, and any areas of concern that may have arisen during their audit. This historical perspective enables the new auditor to understand potential risks and significant issues that may affect the audit engagement. Previous auditors can also share experiences regarding the client's compliance with regulations, financial reporting practices, and the overall integrity of management. This information is crucial for building an effective audit strategy tailored to the client's specific circumstances. While local businesses and media coverage can offer some context and awareness about the client, the detailed and direct knowledge from previous auditors typically results in a more comprehensive understanding of the client's operations and risks. This makes previous auditors a particularly strong source of information for new auditors entering an engagement.