kit learnings

Question 1

if fees is likely to be more than 15% twice in a row

Answer 1

consider doing less assignments
tell TCWG

Question 1

can audit partner be quality control reviewer

Answer 1

no, shud cool off for at least 2 years

Question 2

what shud the annual report include regarding work of audit committee?

Answer 2

− Significant issues considered relating to the financial statements.
− How it has assessed the independence and effectiveness of the external audit
process.
− Where there is no internal audit function, an explanation for the absence and how
internal assurance is achieved.
− An explanation of how auditor independence and objectivity are safeguarded, if the
external auditor provides non‐audit services.

Question 3

shud ia design internal controls

Answer 3

no. self review threat

Question 4

when shud audit partner be rotated

Answer 4

after 7 yrs, if listed co

Question 5

most appt response for recievables

Answer 5

review corredpondence with customer rather than ask directly for balance confirmation

Question 6

how should the inconsistency between the chair’s statement and FS be referred to in the auditor’s report?

Answer 6

in other info section of auditors report
it tells auditor responsibilty related to other information

Question 7

explain Responsibilities of auditor in relation to fraud and error

Answer 7

• An auditor is responsible for obtaining reasonable assurance that the financial statements
  taken as a whole are free from material misstatement, whether caused by fraud or error.
• In order to fulfil this responsibility auditors are required to identify and assess
  the risks of material misstatement of the financial statements due to fraud.
  -The auditor will need to obtain SAE, through designing
  and implementing appropriate responses.
  -auditor must respond appropriately to fraud or suspected fraud identified during the audit.
• When obtaining reasonable assurance, the auditor is responsible for
  maintaining professional scepticism throughout the audit, considering the
  potential for management override of controls and recognising the fact that
  audit procedures that are effective in detecting error may not be effective in
  detecting fraud.
  -To ensure that the whole engagement team is aware of the risks and responsibilities for fraud and error, ISAs require that a discussion is held within
  the team. For members not present at the meeting the engagement partner
  should determine which matters are to be communicated to them.

Question 8

purpose and procedures of obtaining written representations?

Answer 8

Written representations are needed to support other audit evidence
or they may be required by ISAs
they can be used to confirm that management have communicated all defs in internal control of which they r aware

procedure
normally written in form of letter
can be requested from management or directors
thruout fieldwork auditor will note areas on which rep is required
auditor will produce a draft letter, directors will review it and produce it on their letterhead
it is then signed by directors
and dated as at reporting date