audit planning and materiality II

Stages in Audit

1. Preliminary Engagement Activities

2. Planning

3. Understanding Internal Controls

4. Testing of Internal Control

5. Substantive testing

6. Completing the Audit

What stage of the Audit does acceptance and continuance of client relationship happen?

Preliminary Engagement Activities

On which document do you establish an understanding of the terms of the engagement?

Engagement Letter

Contents of an engagement letter

1. Objective & Scope

2. Responsibilities

3. Other reqs

4. Framework

5. Fees

What is the framework used in auditing?

PFRS

Who’s responsibility it is to prepare FS?

Management

Who’s responsibility it is to implement internal control?

Management

Who’s responsibility it is to adjust the FS?

Managament

Who’s responsibility it is to comply with law & regulations?

Management