審計(jì)學(xué)英文教學(xué)課件：Chapter 6 Accepting audit engagement

1、Chapter 6Accepting engagement1Lecturer 陳丹Topic list Channels to obtaining an audit engagement Potential issues to be considered before accepting appointmentProcedures carried by the new auditor after accepting nomination Engagement letter234Advertising5Advertising6Advertising7AdvertisingCode of Ethi

2、csICPOP8Advertising9 “you should be interested in the best tax planning advice. Hawk Associates can ensure that you consider all the alternative tax planning options so that you minimize the amount of tax you might have to pay. No tax saving no fee! ” Advertising “you should be interested in the bes

3、t tax planning advice. Hawk Associates can ensure that you consider all the alternative tax planning options so that you minimize the amount of tax you might have to pay. No tax saving no fee! ” “you should be interested in the best tax planning advice. Hawk Associates can ensure that you consider a

4、ll the alternative tax planning options so that you minimize the amount of tax you might have to pay. No tax saving no fee! ” “you should be interested in the best tax planning advice. Hawk Associates can ensure that you consider all the alternative tax planning options so that you minimize the amou

5、nt of tax you might have to pay. No tax saving no fee! ” “you should be interested in the best tax planning advice. Hawk Associates can ensure that you consider all the alternative tax planning options so that you minimize the amount of tax you might have to pay. No tax saving no fee! ” “you should

6、be interested in the best tax planning advice. Hawk Associates can ensure that you consider all the alternative tax planning options so that you minimize the amount of tax you might have to pay. No tax saving no fee! ” “you should be interested in the best tax planning advice. Hawk Associates can en

7、sure that you consider all the alternative tax planning options so that you minimize the amount of tax you might have to pay. No tax saving no fee! ” 10Advertising11AdvertisingSubstantiated comparisonUnexaggerated claim12AuditorPotential clientsAdvertising13Or ?14TenderingAuditorPotential client Wha

8、t are included in a tender? 15Proposed feeThe lower, the better?Professional competence and due care principleTendering16Proposed feeExpertiseSimilar auditeesNational and international presenceTenderingWhat are included in a tender? Obtain engagementAdvertisingTenderingBefore acceptanceconsider pote

9、ntial issues17Incoming auditorOutgoing auditorClientDirect client requestIncoming auditor18Outgoing auditorWhy wont you continue audit? Professional clearanceIncoming auditor19Outgoing auditorConfidentiality principle Professional clearanceDirect communication?ClientIncoming auditorfecdba20Professio

10、nal clearanceOutgoing auditorIncoming auditor asks client for permission to contact outgoing auditor. If client refuses, incoming auditor should refuse nomination.Incoming auditor writes to outgoing auditor to ask whether there are any professional reasons why they should not accept nomination.21Pro

11、fessional clearanceOutgoing auditor asks client for permission to reply to incoming auditor. If client refuses, incoming auditor should refuse nomination.Outgoing auditor replies, stating there are no professional reason or there are professional reasons and stating those reasons22Professional clear

12、ance23Client screening Mgt integrity? High business risk? Economies of scale? long-term relationship?Independent?Competent?Enough resources?ClientAuditorObtain engagementAdvertisingTenderingBefore acceptanceconsider potential issuesOutgoing auditorProfessional clearanceClient Mgt integrity Risk Enga

13、gement economics Relationship with clientAuditor Independence Competence ResourcesClient screening24Direct client request(a) See a valid notice of the outgoing auditors resignation or removal(b) Obtain a copy of the resolution passed at the general meeting appointing him as the companys auditor(c) S

14、ubmit an engagement letter to the directors of the company25Procedures carried by the new auditor after accepting nominationPrecondition?What? Contents? Why? Frequency? Acceptance of a change in terms?26Audit engagement letter27Audit engagement letterPrecondition for an audit Determine whether the f

15、inancial reporting framework is acceptable. Ensure that management understands its responsibilitiesPreparation of the F/SsInternal control Providing the auditor with access to all information and entity staff28Audit engagement letterPurposes of signing audit engagement letter:Confirm the auditors ac

16、ceptance of appointmentConstitute a commercial contract between the auditor and the clientDefine clearly the responsibilities of directors and auditorsAvoid misunderstandingImprove the speed of fee collection Example of an audit engagement letterTo the board of directors or the appropriate represent

17、ative of senior mgt:You have requested that we audit the balance sheet of as of and the related statements of income and cash flows for the year then ending. We are pleased to confirm our acceptance and our understanding of this engagement by means of this letter. Our audit will be made with the obj

18、ective of our expressing an opinion on the F/S.objective of audit 29We will conduct our audit in accordance with ISA( or refer to relevant national standards or practice). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the F/S are free of mate

19、rial misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the F/S. An audit also includes assessing the accounting principles used and significant estimates made by mgt, as well as evaluating the overall F/S presentation.Scope of audit, incl

20、uding reference to legislation and standards 30Because of the test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and IC system, there is an unavoidable risk that even some material misstatements may remain undiscovered.In addition to our

21、report on the F/S, we expect to provide you with a separate letter concerning any material weaknesses in accounting and IC systems which come to our notice.Unavoidable risk that some MM may not be detected Reference to the expected form and content of any other reports 31We remind you that the respo

22、nsibilities for the preparation of F/Ss including adequate disclosure is that of the mgt of the company. This includes the maintenance of adequate accounting records and ICs, the selection and application of accounting policies, and the safeguarding of assets of the company. As part of our audit pro

23、cess, we will request from mgt written confirmation concerning representations made to us in connection with the audit.Expectation that mgt will provide written representations Mgts responsibilities 32We look forward to full cooperation with your staff and we trust that they will make available to u

24、s whatever records, documentations and other information are requested in connection with our audit. Our fees, which will be billed as work progresses, are based on the time required by the individuals assigned to the engagement plus out-of-pocket expense. Individual hourly rates vary according to t

25、he degree of responsibility involved and the experience and skill required.Auditors right to have access to any information Basis of fees33This letter will be effective for future years unless it is terminated, amended or superseded.Please sign and return the attached copy of this letter to indicate

26、 that it is in accordance with your understanding of the arrangements for our audit of the financial statements.Effective term of the letter 34XYZ&Co.Acknowledged on behalf of ABC Company by(signed).Name and TitleDate35Acceptance of a change in termsA change in the terms of audit engagement prior to

27、 completion may result from: A change in circumstances affecting the need for the service A misunderstanding as to the nature of an audit originally requested A restriction on the scope of the audit engagement, whether imposed by mgt or caused by circumstances36Audit engagement letterAcceptance of a change in termsThe auditor shall not agree