AFM202 Chapter Notes - Chapter 3: Riak, Mutual Fund, Pricewaterhousecoopers

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM202
• Professor: Linda Robinson

Document Summary

Understand the auditee and their business: can"t accept engagement that we are not competent in. Consider management"s integrity: have to rely on documentation we receive from them. Are you independent: 5 threats to independence. Do you want to accept or continue with this client: client with weak integrity, may not be going concern (can"t pay out fees) Prospective client acceptance/continuance: obtain and review financial information, inquire of third parties, communicate with predecessor auditor. Pwc does not take on clients in the gambling industry. How widely distributed are the audited f/s: the more widely distributed (public company), more risky for us as auditor since more people can sue us. How knowledgeable are the people likely to be using the f/s: more knowledgeable, less risky for us, venture capitalist, banks are knowledgeable, people are less. The auditor will develop an overall audit strategy for conducting the audit: determine what resources are needed.