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Audit Presentation Marged

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15 views

Audit Presentation Marged

Uploaded by

Md. G. Rabby
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Welcome

Chapter-2
Presentation on -
Process of Assurance: Obtaining
an Engagement
Assurance Engagement

A professional service that involves an independent party,


typically an auditor or accountant, providing a professional
opinion on the reliability of information presented by
another entity.
Appointment Considerations

1 2 3

Independence Ethical Issues Proper and legal


appointment
01
Ensure professionally
qualified to act

02

Acceptance Ensure existing


resources adequate

procedures 03
Obtain references

04
Communicate with
present auditors
A V/S B
Areas where mistakes are less
likely, allowing for lighter or COMPARISON Areas in an audit where errors
or fraud are more likely,
quicker reviews requiring more detailed
checking

Good Long Term Poor Recent


01 Prospect Performance 01
Likely Lack of
02 Well-Financed
Finance 02
Strong Internal Significant Control
03 03
Low Risk
Controls

Conservative,
Weakness

Questionable
High Risk
04 Prudent Policies Integrity & Policies 04
Competent Honest Lack of Finance
05 Management Director 05
Few Unusual Significant Unexplained
04 Transaction Transaction 06
4 STEPS INFOGRAPHIC ELEMENTS

Enquiries of Other Sources


01 Bankers, Solicitors

Review of Documents
Most Recent Annual Accounts,
Listing Particulars, Credit Ratings
02 03 Previous Accountants
Previous Auditors Should be Invited to
Disclose Fully All Relevant Information

Review of Rules & Standards


Consider Specific Laws/Standards
that relate to the Industry
04
Approach by potential
new audit client
Appointment Decision Chart
YES
Is this the first Prospective auditor can
audit? make own decision

NO
Does client give NO
permission to
contact old
auditor?
YES
Write for all information Prospective auditor should
pertinent to the normally decline the
appointment appointment
Does client give
old auditor
NO
permission to
reply?
YES
Give old auditor due
Does old auditor reply NO notice then decide on
with information relevant
basis of knowledge
to new appointment?
obtained otherwise
YES
Accept/reject
appointment
Post-Nomination Acceptance Procedures
Post-nomination acceptance procedures are the processes and controls that
are implemented after accepting a nomination to ensure compliance, due
diligence, and adherence to standards.
The following procedures should be followed

Ensure that the outgoing auditor's


removal or resignation has been
conducted properly in accordance with
national legislation.

Ensure that the new auditors'


appointment is valid. The new auditors'
should obtain a copy of the resolution The outgoing auditor must promptly transfer all documents,
that was passed at the general meeting
cannot place a lien on company records, and should offer
useful information to the new auditors unless it involves
Set up and submit a letter of considerable effort.
engagement to the directors of the
company

The new auditors' should obtain all the books and


papers belonging to the client from outgoing
auditors'
Why
engagement In any business arrangement, a contractual

letter is
agreement is needed to specify the terms of

engagement. For the audit engagements, the


necessary contractual agreements is referred to as an
before the engagement letter.
start of an
audit?
The Purpose
1 2 3

To minimize the To provide confirmation and


To clearly state the extent of the
misunderstanding between documentation the auditor's
firm's responsibilities
clients and auditors with regards acceptance of the appointment,

to the terms of engagement the objective, scope of the audit


STANDARD AUDIT ENGAGEMNT LETTER
General Items:

1 2 3 4 5

Auditor’s Management’s Reporting


Objective Scope Responsibility Responsibility Framework
Objective
what the audit is trying to achieve

Scope
what will be covered in the audit

• LImitations, exclusions

Reporting Framework
how financial statements should be prepared
IFRS or GAAP
Auditor’s Management’s
Responsibility Responsibility

evaluates financial statements prepares the financial


and provide an independent statements and ensures their
opinion. accuracy.

acts as objective third parties. involved in day-to-day


operations and decision-
making

reports significant findings facilitates access to necessary


and issues. information for the audit
process.
Additional Factors
Fees and billing Arrangements for Dispute
arrangements Predecessor Auditor Resolution

Involvement of Confidentiality Confirmation


Internal Auditors
Thank you!

Do you have any questions?

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