Other
AUE3761 - Tests & Exam Notes 2024
- Course
- Institution
This document summarize the learning material for AUE3761. Exam prep , only important parts is listed.
[Show more]
7 reviews
By: nthabi74 • 3 months ago
By: raymondsooban • 9 months ago
By: mohammedadam • 1 year ago
By: mankokotau • 1 year ago
By: Fieldingcolin • 1 year ago
By: waynevaneck • 2 year ago
By: gracesimbili • 2 year ago
Seller
Follow
EducationSA
Reviews received
Content preview
AUE3761, Accepting a new client: Self assessment TUT 102 - Q1
Four main aspects to be evaluated:
Integrity: Consider the integrity of the client’s management (Auditing Notes, chapter 6; ISA 220 para A8; ISQC 1 para A19).
Competence: Is the audit firm competent to perform the engagement? (Auditing Notes, chapter 6; ISA 220 para A8; ISQC 1 para A18).
Ethics: Do any ethical threats exist between the audit firm and the client? (Auditing Notes, chapter 6; ISA 220 para A8).
Significant matters: Did any such matters arise during the current or previous engagement, the implications of which will affect the
continuance of the relationship? (ISA 220 para A8).
Threats Safeguards
1. 1.
2. 2.
3. 3.
4. 4.
Threats to compliance with fundamental principles:
- Self interest threat
- Self review threat
- Advocacy threat
- Familiarity threat
- Intimidation threat
Other threats:
- Resources to finalise the audit
Safeguards to possible threats: Note - AUE2601 Topic 02
, What is the weaknesses in the engagement letter? (This is what needs to be on an engagement letter) -
Self assessment TUT 102 - Q5.4
- The letter need to be dated
- The letter is needs to be addressed to the appropriate representative of management, that is, the board of directors or the audit
committee.
- It needs to indicate the year to be audited.
- If it is the first audit, imposing a deadline by promising sign-off of the annual financial statements on a near date is inappropriate.
- Auditors do not “certify”; they give an opinion on fair presentation
- It needs to be mentioned that an audit includes evaluating the appropriateness of accounting policies, the reasonableness of
accounting estimates and overall presentation of the financial statements.
- The letter needs to alert the client, because of the inherent limitations of an audit, together with the inherent limitations of internal
control, the unavoidable risk still exists that some material misstatements may not be detected, even though the audit is properly
- There is needs to be an indication that written confirmation of representations of management will be requested.
- Reference need to be made to the use of an expert should this be appropriate.
- Indication needs to be given that management should inform the auditor of any subsequent events.
- Indication needs to be given that management should provide the auditors with access to all information and persons necessary to
perform the audit.
- Basing the fees on a similar audit of a previous year, particularly in the case of a first audit, is not an appropriate method of fee
charging. Fees should be negotiated with the audit committee based on time, skill and experience.
- The explanation of why the letter must be signed and returned needs to refer to the acknowledgement of the terms of the
engagement.
- The letter should be signed by the designated auditor and not the senior audit manager
- The designated auditor needs to be identified.
- Management is responsible for compiling the financial statements and it should be mentioned as such in the audit engagement letter.
- The letter should indicate that the audit will be performed according to International Standards on Auditing and not in accordance
with generally accepted accounting practices
- If there is a mention of an automated system remember CAATS - Computer-assisted audit techniques.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller EducationSA. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.83. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now