Auditing 3

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Auditing 3

  1. 1. 3.1.1 Determine the purpose of statutory engagement  3.1.2 Explain the nature of acceptance of engagement  3.1.3 Discuss the changes in the engagement 
  2. 2. Based on campany act 1965 : - all company must prepared an audited report - Every company must appointed an external auditor - the company must appointed a qualified external auditor for their company. 
  3. 3. Accept client and perform initial audit planning Understand the client’s business and industry Assess client business risk Perform preliminary analytical procedures
  4. 4. Set materiality and assess acceptable audit risk and inherent risk Understanding internal control and assess control risk Gather information to assess fraud risks Develop overall audit plan and audit program
  5. 5.  The auditor should not agree to a change in the terms of the audit engagement when no reasonable justification for doing so exists.  If, prior to completing the audit engagement, the auditor is requested to change the audit engagement to an engagement for which the auditor obtains a lower level of assurance, the auditor should determine whether reasonable justification for doing so exists.
  6. 6.  If the terms of the audit engagement are changed, the auditor and management should agree on and document the new terms of the engagement in an engagement letter or other suitable form of written agreement.  If the auditor concludes that no reasonable justification for a change of the terms of the audit engagement exists and is not permitted by management to continue the original audit engagement, the auditor should ;
  7. 7.  a. withdraw from the audit engagement when possible under applicable law or regulation,  b. communicate the circumstances to those charged with governance,  c. determine whether any obligation, either legal, contractual, or otherwise, exists to report the circumstances to other parties, such as owners, or regulators.
  8. 8.  3.2.1 Describe the purpose of the engagement letter  3.2.2 Discuss the content of the letter
  9. 9. To make agreement between the CA firm & the client for the conduct of the audit & related services  To avoid misunderstanding  To informing the responsibility for both side  To informing that the auditor cannot guarantee that all acts of fraud will be discovered 
  10. 10. Objective of the engagement  Responsibilities of the auditor and management  Limitations and scope of engagement  Timing of the engagement  Agreement of fees 
  11. 11. 3.3.1 Define the meaning of audit planning  3.3.2 Describe the audit planning objectives  3.3.3 Justify the factors to be considered when planning the audit 
  12. 12.  ISA 300 states that the auditor should plan the audit work so that the audit will performed in an effective manner.  Reason; › To obtain sufficient competent evidence › To help keep audit costs reasonable › To avoid misunderstanding
  13. 13.  Appropriate attention is devoted to the different areas of the audit.  Potential problems are identified.  Work is completed expeditiously.  The proper tasks are assigned to the members of the audit team and, if outside experts are engaged, that their work is properly coordinated.
  14. 14. Knowing of the business  Understanding the accounting and internal control systems  Risk and materiality  Nature, timing and extent of procedures  Coordination, direction, supervision and review  Other related matters such as ‘going concern assumption, existence of related parties and other statutory responsibilities. 
  15. 15. PREPARED BY; ILA WANI KILAH FIRA LYN REFERENCE ; INTRODUCTION TO AUDITING, MALAYSIA (CCH ASIA PTE LIMITED)

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