Q.Which of the following is NOT one of the preparatory steps an auditor should take before commencing a new audit?
(A) Obtaining a letter of appointment
(B) Ascertaining the scope of the audit
(C) Preparing the client's financial statements for the year
(D) Studying the legal constitution of the business

Preparatory steps are all about the auditor getting ready to independently examine accounts — never about the auditor doing the client's own accounting work.

Obtaining the letter of appointment, ascertaining the scope of the audit, and studying the legal constitution (MOA/AOA or Partnership Deed) are all genuine preparatory steps described in Section a. Preparing the financial statements themselves is the client's own accounting responsibility — the auditor's job begins only once those statements already exist, to be examined, not authored.

Section a lists the concrete preparatory steps an auditor takes before beginning detailed audit work: obtaining a written letter of appointment, communicating with any previous auditor, ascertaining whether the audit is statutory or non-statutory in scope, studying the entity's legal constitution (Memorandum and Articles of Association, or a Partnership Deed), understanding the nature of the business and its accounting/internal control systems, noting the responsible officials, and drawing up (or reviewing) an audit programme.

None of these steps involves the auditor preparing the client's own financial statements. That is squarely an accounting function, performed by the business itself (or its accountant) before the audit even begins — the auditor's entire role rests on independently examining accounts that someone else has already prepared, a distinction that runs throughout this whole syllabus (see the earlier Unit 3, Introduction to Auditing: "an auditor is not an accountant"). An auditor who prepared the client's own financial statements and then audited them would have compromised the independence the whole exercise depends on.

Options (A), (B), and (D) are all genuine, correctly-described preparatory steps from Section a; only (C) describes an activity that falls outside auditing altogether.

Students sometimes assume the auditor is involved in producing the accounts because the auditor works so closely with them — remember the auditor only ever EXAMINES accounts that the business itself has already prepared; preparing them is never a preparatory audit step.