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a) Identify five additional matters that an external auditor should take into consideration when preparing an audit plan for a new client. b) An auditor shall establish...

      

a) Identify five additional matters that an external auditor should take into consideration
when preparing an audit plan for a new client.
b) An auditor shall establish an overall audit strategy that guides the development of the
audit plan. With reference to the above statement, discuss five matters that the auditor
should consider when establishing the overall audit strategy.

  

Answers


Kavungya
(a) Matters an auditor should take into consideration when preparing for new clients
• Communicate with the previous auditor, where there has been a change of auditors, in
compliance with relevant ethical requirements.
• Major issues such as including the application of accounting principles or of auditing and
reporting standards discussed by management should, be communicated to those charged
with governance.
• Audit procedures necessary to obtain sufficient appropriate audit evidence regarding
opening balances.
• Other procedures required by the firm's system of quality control for initial audit
engagements.
• Perform procedures regarding the acceptance of the client in other words procedures that
must-be-performed. by an auditor before accepting nomination.

(b) Matters an auditor should consider when establishing an overall audit strategy: .
• The financial reporting framework on which the financial information to be audited has
been prepared.
• Industry - specific reporting requirements, such as reports, mandated by industry
regulators.
• The expected audit coverage, including the number and location of components to be
included.
• The reporting currency to be used, including any need for currency translation.
• The nature or the business segments to be audited including the need for specialized
knowledge.
• The availability or the work of internal auditors and the extent of the auditor's potential
reliance on such work.
• The entity's timetable for reporting, such as interim and final stages.
• The discussion with management regarding the expected types and timing of reports to be
issued and communications in connection with the components.
Kavungya answered the question on May 14, 2019 at 12:39


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