What is precondition of audit?
ISA 210 defines preconditions for an audit as follows: ‘The use by management of an acceptable financial reporting framework in the preparation of the financial statements and the agreement of management and, where appropriate, those charged with governance to the premise on which an audit is conducted’.
What is the purpose of PSA 210?
Philippine Standard on Auditing (PSA) 210, “Agreeing the Terms of Audit Engagements” should be read in conjunction with PSA 200 (Revised and Redrafted), “Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Philippine Standards on Auditing.”
What general points should an auditor consider before accepting a new audit client?
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 the auditor responsibilities with respect to compliance with laws and regulations?
a)Auditor’s responsibility is to obtain sufficient and appropriate audit evidence. The auditor was unable to conclude on the compliance made by the company of its applicable laws and regulations due to unavoidable circumstances. c) He shall consider its impact on the financial statement and on his Audit Report.
What are the major factors that should be considered before accepting the client?
Client acceptance evaluation should include General Considerations, Management Integrity, Management Commitment to GAAP, Management Internal Control Consciousness, Financial Strength of the Client, and Other Risk Factors.
What an auditor should consider before accepting an assurance engagement?
They should include the following:
- The objective and scope of the audit;
- The responsibilities of the auditor;
- The responsibilities of management;
- The identification of an applicable financial reporting framework; and.
- Reference to the expected form and content of any reports to be issued.
Which element of quality control focuses on compliance with professional standards legal obligations and regulatory requirements?
1.14 The purpose of the engagement performance element of quality control is to provide the firm with reasonable assurance (a) that engagements are consistently performed in accordance with applicable professional standards and regulatory and legal requirements and (b) that the firm or the engagement partner issues …
What should you do before accepting an audit engagement?
carry out checks to ensure the firm can be independent, is competent to do this audit and has the necessary resources. assess whether this work is suitably low risk. assess the integrity of the company’s directors.
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.
Is an audit a legal requirement?
Your company must have an audit if at any time in the financial year it’s been one of the following: a public company (unless it’s dormant – read the dormant accounts section of the company accounts guidance) an authorised insurance company.
What is the legal responsibility of an auditor?
The auditor is solely responsible for making sure that the financial statements are presented fairly against the appropriate evaluation criteria. In addition, unjustified lawsuits also may involve the phenomenon of audit risk.