Client :

Page 1 of 5
Period Ended :

Audit Area : KNOWLEDGE OF THE CLIENT’S BUSINESS

CONTENTS

1 THE BUSINESS

2 GOALS AND OBJECTIVES

3 LAWS AND REGULATIONS

4 MANAGEMENT AND PERSONNEL

5 REVENUE SOURCES

6 MAJOR CUSTOMERS

7 MAJOR SUPPLIERS

8 MARKET

9 MAJOR FINANCIAL ITEMS

10 LIST OF RELATED PARTIES

Prepared by : Initials : Date :

Reviewed by : Initials : Date :

Audit Manager Approval : Initials : Date :

Audit Partner Approval : Initials : Date :

 Client :

Page 2 of 5
Period Ended :

Audit Area : KNOWLEDGE OF THE CLIENT’S BUSINESS

1. The Business:
a. Describe the effect that current economic factors have on the entitiy (e.g., interest rates, foreign
exchange, inflation, etc).

b. Describe the effect that current industry economic have on the entity (e.g., commodity prices, labor
availability, demand for product, etc)

c. Describe any new, unusual or industry specific accounting practices adopted by the business.

2. Goal and Objectives :

a. What are the short-term and long-term plans for the business?

b. Describe any specific concerns that management has about the business

3. Law and Regulations:

a. What financial reporting laws and regulations is the business subject to?

b. Describe the effect of tax regulation on the entity.

4. Management & Personnel:

a. Describe the composition of the management structure, key personnel, and ownership during the year.

Key Shareholders: Name Shares & percentage of ownership

Key personnel:
(Board of
Commissioners)

Key personnel:
(Board of
Directors, Senior
Management)

b. Describe the types of incentive or bonus/remuneration plans given to management.

5. Revenue Sources
Describe the significant revenue sources of the entity during the year.
 Client :

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Period Ended :

Audit Area : KNOWLEDGE OF THE CLIENT’S BUSINESS

6. Major Customers
Describe the major (top 5) customers of the entity during the year.

7. Major Suppliers
Describe the major (top 5) suppliers of the entity during the year.

8. Market:
a. Who are the business’ competitors?

b. Describe any significant changes in the marketplace.

9. Major Financial Items:

a. How is the business financed?

b. What are the term of any material agreements?

c. Have there been any covenant violations?

d. Describe any major capital investments made during the year and how financed.

e. Describe any major capital disposals.

10. List of related parties and the relationship to the entity: