RSM323H1 Chapter Notes -Financial Audit, Engagement Letter, Retention Period
Document Summary
Chapter 6 - preliminary auditing planning: understanding the auditee. Pre-engagement arrangements: auditors undertake two types of activities before beginning an audit: Auditors try to reduce the risk (probability of something going wrong) by carefully managing the engagement. Auditors manage audit in accordance with quality control standards. Audit engagement acceptance and continuance: client selection and retention: An important element of an accounting firm"s quality control policies and procedures is a system for deciding: to accept a new client, and. Accounting firms are not obligated to accept undesirable clients, nor retain existing audit clients. Client acceptance and retention policies: client acceptance and retention procedures should include: Obtaining and reviewing financial information about prospective client. Understand business risks and determine management"s willingness to accept responsibility for financial statements. Look for news reports, consult with auditee"s banker, legal counsel or others to assess integrity of management. Whether the financial statements presented in accordance with gaap.
