COMMERCE 4AD3 Chapter Notes - Chapter 5: Engagement Letter, Financial Statement, Internal Control
29 Nov 2017
School
Department
Course
Professor
Document Summary
Session 4 - preliminary auditing planning: understand the auditee"s business (ch 5) Ask if there are issues that should be considered in accepting the client. Obtain information from predecessor auditor for planning the audit. Predecessor auditor is required by rules of conduct to respond to the communication. Successor auditor should ask the client to consent to discussions with the predecessor auditor. Consent is not required, communication must take place; but consent allows the predecessor auditor relay more information since they have a duty to maintain confidentiality. However, auditor should be wary of a client that refuses to consent. Audit files belong to the auditor, not the client. Determine if the firm has necessary skills and knowledge. Determine if acceptance violates any applicable regulatoray agency requirements or the code of professional conduct. Engagement letter (contract client on audit arrangement when client is accepted) A new engagement letter should be obtained every year of a continuing audit.
