Module 14

Question 1

What are the key elements of engagement and client management procedures?

Answer 1

• staff management procedures - recruitment, training, performance evaluation, engagement partner
• working paper management -document all audit work, who performed , who reviewed and date. either electronically or manually. should be able to be understood procedures and judgements
• communication with those charged with governance - oral or in writing

Question 2

What must be included in the engagement letter?

Answer 2

• objective and scope of the audit
• responsibilities of the auditor
• responsibilities of management
• identification of the applicable financial reporting framework
• any forms or content issued by the auditor

MAY include fee and billing details and thins such as composition of the audit team

Question 3

Why would a new engagement letter be issued?

Answer 3

theres been misunderstanding or significant changes

Question 4

What is the audit strategy memorandum?

Answer 4

summarises key decisions made during the planning stage. Internal so not given to client

Question 5

What should be included in the audit strategy memorandum?

Answer 5

B SSMART

• Background client info
• systems and control info
• staffing and key client contacts
• materiality
• analytical procedure results
• risk assessment findings and procedures planned in response
• timetable

Question 6

What happens at the audit planning meeting?

Answer 6

discuss the ROMM of the entity

Question 7

what is the management letter?

Answer 7

communicate any weaknesses in the internal controls

1. identify the issue
2. the impact or impactions of the issue
3. recommendation

should be on a prompt basis

Question 8

Who requires a separate engagement quality control reviewer?

Answer 8

listed companies

Question 9

What is the EQCR responsible for doing?

Answer 9

completing a quality control review