Precondition For Audit

Question 1

Precondition for the Audit

Answer 1

Here are the smart notes with clear headings:

Objective of the Auditor (ISA 210)

1. Accept/continue audit engagement only when basis of audit is agreed.
2. Establish preconditions for audit.
3. Confirm common understanding between auditor and management.

Preconditions for Audit (ISA 210)

1. Determine acceptability of financial reporting framework (e.g., IFRS).
2. Obtain management’s agreement on:
   - Responsibility for financial statement preparation.
   - Internal controls to prevent material misstatement.
   - Providing auditor with relevant information and access.

Key Responsibilities of Management

1. Prepare financial statements.
2. Establish and maintain internal controls.
3. Provide auditor with relevant information and access.