ADVANCED AUDIT AND ASSURANCE

Assurance Engagement

Where a practitioner is engaged by one person to express an opinion about the work of another person.

5 elements of assurance engagement

1. 3 party relationship (Practitioner, Responsible party, Intended Users) 2. Subject matter 3. Suitable Criteria 4. Sufficient and Appropriate Evidence 5. Assurance Report

Audit Related Services

1. Review

2. Agreed upon procedures

3. Compilations

Review

1. Low (moderate) level of assurance

2. Negative assurance (Nothing has come to our attention …)

Agreed- upon procedures

Client hiring the accountant specifies the procedures that should be followed in performing the engagement

Compilation

Accountant is engaged to prepare information for the client rather than audit or review the information prepared by someone else.

Why are assurance services regulated

Public interest:

1. so that they operate within ethical boundries

2. so that they apply consistent standards

Regulations applicable to assurance services

National laws

ethical standards (national and professional body standards)

the professional standards adopted by their country, eg ISA

Ethical Regulation

Professional Bodies

laws

IFAC

Law - Appointment of Auditors

s138-9 Companies Act 2019 (Act 992))

Criteria for appointment as auditor

Must write to accept the appointment before being appointed

Must be qualified

Qualification of an auditor

1. Member of the ICA (Chartered Accountants Act, 1963 (Act 170)

2. Practising accountant within the meaning of the Chartered Accountants Act 1963 (Act 170)

Not qualified to be auditors

1. An officer of the company or an associated company

2. A partner of or in the employment of, an officer of the company or an associated company

3. An infant

4. A person found by a competent court to be a person of unsound mind

5. a body corporate, except that members of an incorporated partnership may be appointed in the manner provided by section 139 of the code

6. Anyone in respect of whom an order shall be made under section 177 of this code so long as such order remains in force unless leave to act as auditor of the company concerned has been given by the court.

7. An undischarged bankrupt, unless that person has been granted leave to act as auditor of the company concerned by court by which the adjudication as bankrupt was made; and

8. a person who is for the time being disqualified from acting as auditor of a company by order of the Registrar.