ACCT 497 Lecture Notes - Lecture 7: Quality Assurance, Engagement Letter, Internal Audit
22 Feb 2017
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Stages of an audit: obtain (or retain) engagement, engagement planning. When are you going to do it, how many hours, who is going to be on the team: risk assessment. If client has high risk, you need to collect more evidence: substantive procedures, reporting. Pre-engagement activities: client acceptance or continuance, communication between predecessor and prospective auditors, compliance with independence and ethical requirements, engagement letters, termination letter. Communication between predecessor and prospective auditors: attempt to communicate is required, if client permits, issues to discuss. Disagreements about accounting principles or audit procedures. Communications the predecessor auditors gave the former client about fraud, illegal acts, and internal control recommendations. The predecessor auditors" understanding about the reasons for the change of auditors (particularly about the predecessor auditors" termination): why previous auditor stopped or why they are finding a new auditor. This is important to know and they need to have integrity: other sources: Staffing the audit engagement: teams usually consist of the:
