Chapter 3 Part 4

Question 1

engagement letter, staff assignment notes, prelim analytic procedures results, risk assessment, materiality assessments. Often summarized in PLANNING MEMO.

Answer 1

What info would you expect to find in a current audit file?

Question 2

What is considered the most important content of the auditor’s current audit documentation files?

Answer 2

Auditors’ conclusions. Include
1. reconcile
2. work planned
3. understand client internal control
4. sufficient appropriate audit evidence
*explain unusual issues

Question 3

five years for the conclusion of engagement (NONPUBLIC)

Answer 3

What are the document retention for nonpublic?

Question 4

seven years for the conclusion of engagement (PUBLIC)

Answer 4

What are the document retention for public clients?

Question 4

Can you eliminate engagement risk?

Answer 4

You can by not do it at all

Question 5

Should this outside specialist be independent of my client?

Answer 5

Yes you’d want them to be independent personally

Question 6

If you ask the old client to talk to the old auditor and they say no can you still accept the engagement?

Answer 6

You still can accept the engagement but it would be a very dumb decision.

Internal auditors can’t provide professional judgment

Question 7

to change you auditor what must a client do?

Answer 7

Client must file 8-K report disagreement to change auditors to the public and why

The old auditors must also be with the client to communicate their own reason

Attempt to communicate is the only requirement - due to CONFIDENTIALITY