What factors should an auditor consider prior to accepting an engagement quizlet?

What factors should an auditor consider prior to accepting an 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 …

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.

What factors should be taken into consideration to ensure the set up of a viable audit department?

5 Key Factors to Enhance Audit Committee Effectiveness

  • Audit committee transparency. …
  • Effective communication. …
  • Committee composition – including appropriate skills, competencies and expertise. …
  • How it gets its work done – efficient and effective ways of working. …
  • Strength of the finance function.
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What factors should be considered while preparing an audit procedure?

The planned nature, timing, and extent of the risk assessment procedures; The planned nature, timing, and extent of tests of controls and substantive procedures;12 and. Other planned audit procedures required to be performed so that the engagement complies with PCAOB standards.

Why an auditor might not accept an audit engagement?

Audit engagement should not be accepted under following circumstances: Serious limitations on scope. Financial reporting framework is unacceptable. Management refuses to provide agreement that it acknowledges its responsibility as regards financial statements.

What are the objectives of the auditor when she he accepts the audit engagement of a company?

The objective of an audit is to form an independent opinion on the financial statements of the audited entity. The opinion includes whether the financial statements show a true and fair view, and have been properly prepared in accordance with accounting standards.

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.

How do you prepare for an audit engagement?

Preparing for an Audit Engagement?

  1. Plan ahead. …
  2. Ensure ease of access of accounting records. …
  3. Prepare internal financial analysis. …
  4. Seek assistance for complex accounting. …
  5. Review prior year adjusting entries. …
  6. Ensure books are kept accurate throughout the year. …
  7. Self-review for quality control. …
  8. Communicate with auditors.
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What are the requirements when accepting and managing assurance engagement?

The five elements of an assurance engagement

  • A three-party relationship, involving: the practitioner, a responsible party and intended users.
  • Appropriate subject matter.
  • Suitable criteria.
  • Sufficient, appropriate evidence to support the conclusion.
  • A conclusion contained within a written report.

What are the considerations to be kept in mind before taking up a new audit?

Answer

  • A few of the things to consider before commencing a new audit are:
  • Making a list of books used, making a list of employees and their duties.
  • Testing the final accounts, trial balance, ledgers, etc.
  • Arranging of supporting documents.
  • Listing the assets and liabilities for the auditor to scrutinize.

What factors would you suggest an audit committee look at in evaluating the external auditor’s independence?

In determining the appropriateness of the external auditor, the audit committee should have full regard to the auditor’s competence, the quality and efficiency of the audit, and whether the audit fee is appropriate in relation to size, complexity, and risk and control profile of the company.