Planning your client's first audit;

              Planning Your Client's First Audit
by CLYDE F. BRENNAN Principal, Houston Office
Adapted from an address before the Texas Society of Certi­fied
Public Accountants, Houston Chapter—December 1968
VERY CPA attempts to serve his client in every way possible, be it advice on tax problems, assistance in areas related to management services, or performing an audit. Of these three services, the audit generally is the most time-consuming and may present the most problems. The client's reason for requesting an audit may be one or a combination of things:
• To establish accountability
• To supply financial information to vendors
• To satisfy lender in a potential borrowing
• To furnish required information for public financing
• To fulfill a contractual obligation, such as stipulated in a profit-sharing plan
• To satisfy stockholders
Years ago, this service for a client would have been performed in a routine fashion, but today we are faced with many more problems. In recent years, the accountant's legal responsibility has come sharply into focus, with the extent and range of liability greatly increased, and the accountant now finds himself being held accountable to third parties in a much greater degree. Spiraling costs are also plaguing the CPA, but if he hopes to satisfy his client, he will have to perform the audit in a most efficient manner. Minimizing his legal liability while performing the audit in the most efficient manner is indeed a challenge to the CPA.
GENERALLY ACCEPTED AUDITING STANDARDS
Before delving into the problems presented in planning the first audit of a client, let us briefly review the generally accepted auditing standards as approved and adopted by the membership of the AICPA and published as a part of Statements on Auditing Procedure No. 33:
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