212157
Description
Mind Map by littlepaz_2001, updated more than 1 year ago
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Created by littlepaz_2001
almost 11 years ago
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ISA 210 - Agreeing the terms of audit engagements
- Objective of ISA 210
- To accept or continue an audit engagement only when the basis upon which it is to be performed
has been agreed through:-
- Establishing whether the PRECONDITIONS FOR AN AUDIT are present
- The auditor shall determine whether the financial reporting framework
to be applied in the preparation of the financial statements is
acceptable
- Ensure that management understand their RESPONSIBILITIES
- Preparation of the financial statements in
accordance with the applicable financial
reporting framework
- Enable the preparation of financial statements that are free from
MATERIAL MISSTATEMENT whether due to FRAUD or ERROR
- Provide the auditor with:-
- Access to all information
- Additional information that the auditor may request
- Unrestricted access to persons within the entity
- Unrestricted access to persons within the entity
- Additional information that the auditor may request
- Access to all information
- Preparation of the financial statements in
accordance with the applicable financial
reporting framework
- Ensure that management understand their RESPONSIBILITIES
- The auditor shall determine whether the financial reporting framework
to be applied in the preparation of the financial statements is
acceptable
- Confirming that there is a COMMON UNDERSTANDING between
the auditor & management of the terms of the audit engagement
- Establishing whether the PRECONDITIONS FOR AN AUDIT are present
- To accept or continue an audit engagement only when the basis upon which it is to be performed
has been agreed through:-
- Engagement Letter
- Contractual form
- Matters which SHALL be clarified in the engagement letter
- Objective & scope of the audit
- Auditor's responsibilities
- Managements responsibilities
- Identification of applicable
financial reporting framework
- Expected form & contents of reports to be issued by the
auditor & statement that there may be circumstances when a
report may differ from this
- Objective & scope of the audit
- Recurring audits
- Not required to send a new letter for each audit, but must ensure
that the client still understands existing terms
- Not required to send a new letter for each audit, but must ensure
that the client still understands existing terms
- Contractual form
- Other changes in agreement terms
- The auditor shall not agree to a change in the terms of the
audit engagement where there is no reasonable justification
for doing so
- If there is reasonable justification for changing
the terms, the new terms should be agreed upon
& recorded
- If the auditor is not able to agree to new terms
- Withdraw
- Consider if it is necessary to report
the circumstances to other parties
such as the shareholders or
regulators
- Withdraw
- The auditor shall not agree to a change in the terms of the
audit engagement where there is no reasonable justification
for doing so
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