Ch 3. Professional appointment

Question 1

Issues to consider when accepting an engagement (10)

Answer 1

• Independence and objectivity
• Mgmt integrity
• Money laundering (client due diligence)
• Resources
• Risks
• Fees
• Professional Competence
• Reputation of client
• Preconditions for audit
• Professional clearance

Question 2

Prior to accepting a new client (6)

Answer 2

1. Member asked to accept nomination as auditor
2. Request prospective client’s permission to communicate with existing auditor
3. Request in writing all information necessary to decide whether to accept nomination
4. On receipt, existing auditor requests permission of client to communicate with proposed nominee
5. Discuss all info by nominee to assist in his decision
6. Discuss freely with nominee all matters relevant to the appointment

Question 3

Engagement letters (5)

Answer 3

• Objective and scope of audit
• Responsibilities of auditor
• Responsibility of mgmt
• Identification of applicable FR framework
• Expected form and content of reports to be issued.