Question

If the auditor does not have experience with a specific industry, how can he or she...

If the auditor does not have experience with a specific industry, how can he or she gain this experience? Is it possible to bid on an audit engagement where an auditor does not have experience with the industry? If so, can the auditor get this experience after acceptance of the engagement, or should that be done prior to acceptance?

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Answer #1

The auditor can gain experience by going through previous audited financial reports of the company done by other auditors. The new auditor should study these reports for understanding industry trend, activities, areas of responsibilities, etc.

There is no harm bidding in a non-experienced industry. Accounting concepts and principles are same for all industry; only the difference is presentations and treatments – such as a real estate business records property selling as revenue income, whereas a manufacturing business records the same as capital income.

The auditor should take some kind of knowledge through the study of previous financial reports and then should start working. The rest of the experiences he can gather while doing the job.

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