Task 1
Type of Audit
Limited, regular, none at all? First things first.

Here is the background information on your task
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.

Here is your task
- Does this client need to undergo an ordinary or a limited audit?
- Or may the client legally dispense with an audit this year?

Resources to help you with the task
Find a recap of Kevin’s case explanation below!
Resources for the task
Use the linked PDF’s for helpful guidance on completing your task
Business Analysis Framework (BAF)
Basics of the Swiss Audit Options Model
Helpful hint: In 2019, the hotel had 120 employees and 21 apprentices, and the previous year 119 and 21 respectively.
By the way: Because you must be curious about PwC’s audit database, check out this video to get a better understanding for how we do it in practice.