Assurance responsibilities Flashcards
What are the general responsibilities of Directors in an assurance?
> Maintain accounting records
Prepare FS
Safeguard assets
What are the general responsibilities of Auditors in an assurance?
> Follow CA06
Set out terms (in an engagement letter)
Follow ethical standards
Perform quality control procedures
What are the responsibilities regarding ‘Audit & Internal Control’ of Directors in an assurance?
> Prepare FS
Design internal controls which prevent, detect and correct errors / omissions
What are the responsibilities regarding ‘Audit & Internal Control’ of Auditors in an assurance?
> Express opinion on the FS
Detect material errors
Test internal controls if they address audit risks (relate to FS)
Communicate weaknesses in internal controls to those charged with governance
What are the responsibilities regarding ‘Fraud’ of Directors in an assurance?
> Prevent, detect and correct any instances of fraud
What are the responsibilities regarding ‘Fraud’ of the Auditors in an assurance?
ISA 240
> Detect material frauds in the FS
Obtain written representation from Directors acknowledging their responsibilities
Communicate any instances of fraud with 1) management 2) those charged with governance (directors / audit committee)
3) Regulatory authorities
What are the responsibilities regarding ‘Laws & Regulations’ of Directors in an assurance?
ISA 250A
> Identify all relevant laws and regulations
Be compliant
What are the responsibilities regarding ‘Laws & Regulations’ of the auditors in an assurance?
ISA 250A
> Consider any instances of non-compliance:
Do they cause errors / omissions in the FS
E.g. Provisions, Impairments, Fines, GC Issues
Directly impacting FS - obtain sufficient and appropriate evidence.
> H&S - enquiry of management and review correspondence files.
Communicate with 1) those charged with governance 2) shareholders 3) third parties
What are the responsibilities regarding ‘Related Parties’ of Directors in an assurance?
ISA 550
> Identify all related parties
Disclose transactions
What are the responsibilities regarding ‘Related Parties’ of the Auditors in an assurance?
ISA 550
> Audit the disclosures provided relating to Related Parties.
What are the responsibilities regarding ‘Going Concern’ of Directors in an assurance?
ISA 570
> Make an assessment as to whether the company is a GC or not
Prepare forecasts to provide evidence to support GC assumption
What are the responsibilities regarding ‘Going Concern’ of the Auditors in an assurance?
ISA 570
> Audit the GC assumption
What are the responsibilities regarding ‘Money Laundering’ of Directors in an assurance?
> Prevent ML in your organization through use of internal controls
Don’t do it
What are the responsibilities regarding ‘Money Laundering’ of the Auditors in an assurance?
> Appoint MLRO
MLRO to report suspicions to NCA
Provide staff with training on how to spot
Perform client ID procedures
Keep records
Don’t tip off if you do have suspicions
What are the responsibilities regarding ‘Bribery’ of Directors in an assurance?
> Prevent bribery in organization through internal controls
