Auditing-Handout-Accepting-Audit-Engagement
Auditing-Handout-Accepting-Audit-Engagement
Ang pagdedesisyon kung tatanggapin (para sa new clients) o ipagpapatuloy (recurring or continuing clients) ang isang audit
engagement ang pinakaunang dapat gawin ng auditor. Dito, ang mahalagang tanong na dapat masagot ay, “tatanggapin mo ba ang
isang audit engagement o hindi?”
ACCEPTING AUDIT
ENGAGEMENT
AUDITOR’S SIDE CLIENT’S SIDE
May sapat ka bang kakayanan para Communicating with the predecessor auditor – kung may dati naman auditor ang potential client,
magawa ang audit nang wasto.? pwede mo syang kausapin, but take note, paalam ka muna sa client mo kung papayag. Kapag hindi
Kung hindi, sapat may panahon ka pumayag, isa iyan sa dapat mong ikonsidera na baka may tinatago ang client na kung ano na
pa para pag-aralan ang nature ng makaaapekto sa pagtanggap mo sa audit. Kung pumayag naman, mas mabuti.
operation ng client, at ng industry
na kinabibilangan nito. Kung hindi Ito ang mga kailangan mong itanong sa predecessor auditor: (1) Bakit kaya nagpalit ng auditor?
magagawan ng paraan para ma- May problema kaya? (2) May pagtatalo ba sa pagitan nila ng client? (3) Ano ang masasabi niya sa
achieve ang sapat na degree of integridad ng client?. After mong making sa mga pahayag niya, magkakaideya ka na sa integrity ng
competence, reject the potential client.
engagement. Huwag kang bida-
bida
Ano ang mga dapat i-consider kung continuing o recurring ang client?
Tumutukoy naman ito sa mga
resources na gagamitin upang Generally hindi na kailangan ng panibagong engagement letter kung continuing
ma-accomplish ang audit. May naman ang client. Pero kung sa palagay mo bilang auditor ay may mga hindi
sapat bang qualified na pagkakaunawaan at may mga dapat linawin regarding sa terms ng engagement,
personnel, at may sapat ba silang this is the time na kailangan mong magbigay ng bagong engagement letter. Isa
oras para maisagawa ang audit pang reason is kung may pagbabago sa management, kailangan mo sa kanilang
nang maayos? Kinakailangan ring ma-clarify ang terms ng engagement. Gayundin kung may pagbabago sa nature
sapat ang supervision upang
ng business, halimbawa ay nagkaroon ng expansion at kung ano- ano pa.
masigurong tama at mataas ang
quality ng audit.
To the Board of Directors of ACE Company:
You have requested to audit the financial statements of ACE Company as of and for the
year ended December 31, 2019 inclusive of the balance sheet, the income statement and
statement of cash flows. We are pleased to confirm our acceptance and our understanding
of this engagement by means of this letter. Our audit will be made with the objective of
expressing an opinion to your financial statements. Objective of the Audit
We will conduct our audit in accordance with Philippine Standards on Auditing. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant Scope of the Audit
estimates made by management, as well as evaluating the overall financial statement
presentation.
Because of the test nature and other inherent limitations of an audit together with the
inherent limitations of any accounting and internal control system, there is an unavoidable Unavoidable risk that
risk that even some material misstatements may remain undiscovered. material misstatements may
remain undiscovered
In addition to our report on the financial statements, we expect to provide you with a Additional report
separate letter concerning any material weaknesses in accounting and internal control expected to issued
systems which come to our notice.
Furthermore, we are informing you the possible use of outside parties including experts, Use of experts and
other auditors, and some internal personnel including the internal auditor, in connection other persons
with the audit.
Management’s
We remind you that the responsibility for the preparation of the financial statement Responsibility for the fair
including adequate disclosure is that of the management of the company. This includes the presentation of FS
maintenance of adequate accounting records and internal controls, the selection and
application of accounting policies, and the safeguarding of the assets of the company. As
part of our audit process, we will request from management written confirmation Expectation to receive
concerning representations made to us in connection with the audit. management
representation letter
We look forward to full cooperation with your staff and we trust that they will make
Unrestricted access to records
available to us whatever records, documentation, and other information are requested in
connection with our audit. Our fees, which will be billed as work progresses, are based on
the time required by the individuals assigned to the engagement plus out-of-pocket Billing Arrangements
expenses. Individual hourly rates vary according the degree of responsibility involved and
the skill required.
This letter will be effective for future years unless it is terminated, amended or suspended.
Please sign and return the attached copy of this letter to indicate that it is in accordance with
your understanding of the arrangements for our audit of the financial statements. Confirmation by client
______________________
Name and Title
Date
Kailangan bang bigyan ng separate engagement letter ang mga subsidiary ng isang parent corporation?
Kung ikaw rin ang auditor ng subsidiary, generally dapat kang magbigay ng separate na engagement letter. Pero
consider mo muna ang ilang bagay: (1) kung kailangan bang mag-issue ng separate audit report sa subsidiary, (2) kung
legally required bang magbigay ng separate engagement letter, (3) kung gaano ba kalaki ang ownership ni parent
corporation sa kanyang subsidiary, (4) kung gaano ba ka-dependent o ka-independent ang management ng subsidiary sa
management ng parent.