Process of assurance: obtaining an engagement

Question 1

What are the acceptance procedures an auditor must carry out?

Answer 1

Ensure professionally qualified to act (ethical or legals grounds)
Ensure existing resources are adequate
Obtain references
Communicate with present auditors
Consider the integrity of those managing the company

Question 2

What is another consideration an auditor must consider before accepting an engagement?

Answer 2

Whether the client is likely to be high or low risk

Question 3

What are the procedures that should be carried out after accepting nomination?

Answer 3

Ensure outgoing auditors’ removal or resignation has been properly conducted
Ensure new auditor’s appointment is valid
Submit a letter of engagement
Do money laundering checks

Question 4

What must assurance firms do to comply with money laundering regulations 2007?

Answer 4

Assurance firms must keep certain records about clients and undertake client due diligence

Question 5

When is it mandatory to check the identity of all clients before work is undertaken?

Answer 5

When an ongoing relationship is envisaged

Where a one off transaction greater than 15,000 euros will take place

Question 6

What identification checks should be made for individuals?

Answer 6

Photograph
Full name
Permanent address
e.g. Passport and Utility bill

Question 7

What identification checks should be made for companies?

Answer 7

Certification of incorporation
Registered address
Confirmation statement (annual return)
Previous financial statements

Question 8

What items must be included in the engagement letter?

Answer 8

M - Management's responsibility
A - Auditors responsibility
C - Confirmation of audit output and form of any reports
R - Reporting framework
O - Objective of audit
S - Scope of audit

Question 9

How long must copies be kept of identification checks made for individuals or companies?

Answer 9

5 years after the relationship with the client has ended