What should you do before accepting an audit engagement?
Assuming independence and requisite technical abilities, the pre- acceptance evaluation of a prospective audit engagement normally focuses on three factors: 1) personal integrity of the prospective client’s management and principals, 2) presence of circumstances pointing towards unusual risks in the engagement or …
What are some of the steps that an auditor takes after an audit engagement has been accepted?
The following are some of the steps an auditor takes after an audit engagement has been accepted:
- Visit predecessor auditor for a second time to review audit documentation from previous audit(s).
- Make a preliminary assessment of the quantitative size of a material misstatement.
What pre-engagement activities should be performed by the auditor before planning of the audit can start?
Before the audit begins, the auditor performs pre-engagement acceptance or continuance procedures.
- an independence assessment;
- a pre-engagement assessment; and.
- communications with the previous auditor (if applicable).
Which is the 4 steps in accepting an audit engagement?
Each audit engagement is unique, but most share the basic steps of preparation, planning, field testing, and audit procedures, as well as subsequently rendering the audit opinion.
When should you not accept an audit engagement?
If the preconditions for an audit are not present, the auditor should discuss the matter with management, and should not accept the engagement unless required to do so by law or regulation.
What are the 4 phases of an audit process?
Although every audit process is unique, the audit process is similar for most engagements and normally consists of four stages: Planning (sometimes called Survey or Preliminary Review), Fieldwork, Audit Report and Follow-up Review. Client involvement is critical at each stage of the audit process.
What is permanent and current audit file?
Permanent audit files include information that concerns the organizational and legal structure of a client. Current files consist of information relating to correspondences, planning process, audit programmers, accounting records, etc.
When an auditor is asked to accept a new client?
When an auditor is asked to accept a new client: The auditor must ask permission of the client before contacting the process or auditor. An entity acceptance questionnaire, checklist, or memo is generally prepared to document the investigation.
Who is responsible for audit plan?
Responsibility of the Engagement Partner for Planning
. 03 The engagement partner1 is responsible for the engagement and its performance. Accordingly, the engagement partner is responsible for planning the audit and may seek assistance from appropriate engagement team members in fulfilling this responsibility.
What is the audit strategy?
An audit strategy sets the direction, timing, and scope of an audit. The strategy is then used as a guideline when developing an audit plan. … The strategy document usually includes a statement of the key decisions needed to properly plan the audit.
What does an audit plan include?
Typically an audit plan will include sections dealing with business understanding, risk assessment procedures, planned audit procedures ie the responses to the risks identified and other mandatory audit procedures. The audit strategy and audit plan are not fixed once the planning stage of the audit is complete.
Which is generally the most persuasive form of evidence?
The most persuasive evidence, generally, is the externally generated evidence sent directly to the auditor, and the least persuasive evidence is, generally, the internally generated evidence. Discuss the impact of electronic processing of transactions on the audit.
Why is auditing an important engagement?
This helps to dissect responsibilities in the senses that the management is responsible for the preparation of financial statements, whereas the auditor is responsible to ensure that these financial statements have not been understated or misused. …
What are the steps in audit engagement?
The Audit Process is divided into four phases, namely: audit engagement planning, audit execution, audit reporting, and audit follow-up. This audit process is applicable for both management and operations audit. For each phase, there are specific criteria to ensure a successful audit engagement.