What situation would likely make an accountant not accept a new audit engagement?
Show
Accepting audit engagementsPreconditions for an auditAuditors should only accept a new audit engagement, or continue an existing audit engagement if the 'preconditions for an audit' required by ISA 210 Agreeing the terms of audit engagements are present. ISA 210 requires the auditor to:
If the preconditions for an audit are not present, the auditor should discuss the matter with management, and should not accept the engagement unless required to do so by law or regulation. ProceduresIf offered an audit role, the auditor should:
Engagement lettersThe engagement letter will be sent before the audit. It specifies the nature of the contract between the audit firm and the client and minimises the risk of any misunderstanding of the auditor's role. It should be reviewed every year to ensure that it is up to date but does not need to be reissued every year unless there are changes to the terms of the engagement. The auditor must issue a new engagement letter if the scope or context of the assignment changes after initial appointment. ISA 210 requires the auditor to consider whether there is a need to remind the entity of the existing terms of the audit engagement for recurring audits and many firms choose to send a new letter every year, to emphasise its importance to clients. The contents of the engagement letterThe contents of a letter of engagement for audit services are listed in ISA 210 Agreeing the Terms of Audit Engagements. They should include the following:
In addition to the above the engagement letter may also make reference to:
Under what circumstances the auditor should not accept an audit engagement?If management or those charged with governance impose a limitation on the scope of the auditor's work in the terms of a proposed audit engagement such that the auditor believes the limitation will result in the auditor disclaiming an opinion on the financial statements, the auditor shall not accept such a limited ...
Why would an accountant not accept a new audit engagement?Which of the following factors would most likely cause a CPA to decide not to accept a new audit engagement? Management's disregard for internal control. Which of the following matters is generally included in an auditor's engagement letter? Limitations of the engagement.
What factor below most likely would cause an auditor not to accept a new audit engagement?Which of the following factors most likely would cause an auditor not to accept a new audit engagement? An inadequate understanding of the entity's internal controls.
What factors would you consider before accepting the audit engagement?Points to consider before accepting the Audit. Background information.. Eligibility.. Management assessment.. Investigation of industry involvement and risk factor.. |