The auditor
should undertake the following activities at the beginning of the current audit
engagement:
a) Performing procedures required,
regarding the continuance of the client relationship and the specific audit
engagement;
b) Evaluating compliance with relevant ethical
requirements and;
c) Establishing an understanding of the
terms of the engagement.
The auditor's
consideration of client continuance and relevant ethical requirements,
including independence, occurs throughout the audit engagement as conditions
and changes in circumstances occur. Performing initial procedures on both
client continuance and evaluation of relevant ethical requirements (including
independence) at the beginning of the current audit engagement means that they
are completed prior to the performance of other significant activities for the
current audit engagement. For continuing audit engagements, such initial
procedures often begin shortly after (or in connection with) the completion of
the previous audit.
Performing
the preliminary engagement activities, which are specified in above, at the
beginning of the current audit engagement assists the auditor in identifying
and evaluating events or circumstances that may adversely affect the auditor's
ability to plan and perform the audit engagement.
Performing
these preliminary engagement activities enables the auditor to plan an audit
engagement for which, for example:
·
the
auditor maintains the necessary independence and ability to perform the
engagement.
·
the
auditor has no issues with management integrity that may affect the auditor's
willingness to continue the engagement.
·
the
auditor has no misunderstanding with the entity about the terms of the
engagement.
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