The Board of Directors of a five-star hotel, our long-standing client, has again elected PwC as their auditor. We have received an intimation letter and a confirmation of the mandate offer. As every year, before accepting the offer, we conduct a risk analysis of the audit mandate.

The question is: what form should the audit take? We’ll get to that in a minute. But first, let’s continue with the process.

Using our central database, our lead auditors and you will perform a risk assessment for the business and its relationships with customers and determine a total score for the hotel. To ensure an efficient audit, we provide the client with a list of the documents we require, which always includes the balance sheet and the income statement. We also look into our previous documentation to point out risks. In this case: during previous annual audits, on several occasions, we’ve found inexplicable differences between the hotel’s supply stocks and their valuation.