Responsibilities

Question 1

Name the elements of an assurance engagement. (CREST)

Answer 1

Criteria
Report
Evidence
Subject matter
Three party relationship

Question 2

Criteria

Answer 2

~ Audits required by law to use ISAs, IFRSs, Co act ‘06

~ non-audit use ISAEs and ISREs (optional)

Question 3

Report

Answer 3

Audit opinion vs Assurance conclusion

Question 4

Audit opinion

Answer 4

~ reasonable assurance
~ expressed positively
~ in auditors op. FS are ‘true and fair’

Question 5

Assurance conclusion

Answer 5

~ limited assurance
~ expressed negatively
~ ‘nothing has come to our attention’

Question 6

Subject matter

Answer 6

~ non-audit documents will be bespoke

~ may need to add caveats for forecasts

Question 7

Three party relationship

Answer 7

~ FS primarily used by SH and are publicly available

~ other report may have different users and could be publish/confidential

Question 8

Benefits of assurance

Answer 8

~ increased credibility of subject matter
~ may find deficiencies in subject matter
~ will make later assurance engagements easier
~ will help business (e.g. apply for loan, 2nd set of professional eyes)

Question 9

Exempt from audit if…

Answer 9

~ < 50 e’ee
~ revenue < £10.2m
~ gross assets

Question 10

Directors responsibility: General

Answer 10

~ maintain accounting records
~ prep FS
~ safeguard assets

Question 11

Directors responsibility: Audit/IC

Answer 11

~ design IC which will prevent, detect and correct errors and omissions

Question 12

Directors responsibility: Fraud

Answer 12

prevent, detect and correct any instance of fraud

Question 13

Directors responsibility: Laws and regs

Answer 13

Identify and comply with all relevant laws and regs

Question 14

Directors responsibility: going concern

Answer 14

~ do going concern assessment

~ prep forecasts to support going concern assumption

Question 15

Directors responsibility: ML/Bribery

Answer 15

prevent through internal controls

Question 16

Auditors responsibility: Audit/IC

Answer 16

~ express op. on FS
~ detect material misstatements
~ test internal controls addressing audit risks
~communicate IC weaknesses to TCWG

Question 17

Auditors responsibility: Fraud

Answer 17

~detect material fraud in FS
~ obtain written rep from directors acknowledging their respon.
~communicate fraud found w/ mgt, TCWG and regs.

Question 18

Auditors responsibility: ML

Answer 18

~ appoint MLRO
~ MLRO report suspicions to NCA
~ train staff to spot
~ perform client identification procedures
~ keep records
~ don't tip off

Question 19

Auditors responsibility: Bribery

Answer 19

~ consider risks on non-compliance

~ report suspicions to NCA