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ISA 210 - Agreeing the terms of audit engagements
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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
- Additional information that the auditor may request
- Access to all information
- 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
- Recurring audits
- Not required to send a new letter for each audit, but must ensure that the client still understands existing terms
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
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- Mind Map on ISA 210 - Agreeing the terms of audit engagements, created by littlepaz_2001 on 16/09/2013.
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- littlepaz_2001
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