Engagement 1Basic Principals (governing an audit) Compliance with CoE Compliance with BSAs/ISAs Professional Skepticism 1Elements of Assurance

Engagement 3Party: Responsible, Practitioner, User of FR Subject Matter Suitable Criteria SAAE Written Report 2Engagement Terms must cover

Engagement will need to bePlanned Performed Concluded upon Reported on Time Frame 95Term of audit engagement covers Scope of Engg Subject matter of Engg Criteria of Subject matter judgment Level of assurance given & opinion to be given Timings Associates with engg

Any Restriction in liability Fees & billing arrangements 98Terms of change of engagement Auditor & client must come in agreement IF they cant agree, withdraw engagement 2Firm Considerations RL + Tenor of Relationship + Conflct^Int + Resource 3Pre Accept Procedure Prof. Qualification Recources Needed X-Adtr Commu

Ref. Collection (About Client) 4Steps of Engg. Acceptance Client Intimation Mgt Integrity Evalu Identify Special Circumstances & Unusual circumstance Assess Competence to perform audit Evaluate independence Determine ability to use due care Prepare Engagement Letter 86Write Tendering Process Go with Bid Process Several firms are invited to bid for the assignment

Firms expose their attributes & charges One firm is given scope for doing the job 87Precondition for tender Quality of the service prospective Knowledge of business process Experience in the industry level Proposed personnel on audit team Ref. obtained about the audit firm 5Entity Basic Factors Mgt Intg + Risk (AAC) 6Risk Factors Analysis Prospect + Fin + IC +

A/c Policy + Mgt. Ctrl + Level-UTr. 7Stage of New Engagement X-adtr commu permission + Cient Agree collect + AEL Sending + AEL Acknow 8Types /Class of Audit Legal Envi Statutory n-Statutory Activity Types FSA Compliance and Comprehensive Performance or value-for-money audit Social audit

Internal Adt ObjectiveFSA Compliance and Comprehensive Operational Audit Affiliation External vs Internal Government audit 9Post Accept Procedure X-Adtr Proper Removal Valid Appointment AEL Submit & Ack

10BoA & WP Collect BoA + Collect Adt File 18Principal items to agree b4 engg Ask This Question to Class Teacher 27What may let to limitation of scope When auditor get MM due to FEAR which are not covered in WMR, a limitation of scope arises AEL 96AEL covers Objective of Audit of FS Mgt Resp. for FS Scope of Audit

Forms of Reports & Communication Limitations of Audit Unrestricted access 11AEL Purpose Firm Resp ^ Extnt + W. Confirmation 12AEL Contents Gen _ Obj + Scop + Mgt. Res + Un-R Acess+ Inherent Limit Opt _ adt pln + Adt Expec+Acknoledge+Fees & Bill Relv _ Oth Adtr & Expart + Client Staff + Pred. Adtr Engg 13General Contents of AEL 14Optional Content of AEL

15Relevant Content of AEL 16Previous adtr resigned- tell 3 reason for which invited adtr should also decline engagement =Ask this question to teacher 90Auditors consideration B4 accepting audit Result of Risk Analysis Ethical Barriers to accept Whether firm has resources to undertake this assignment Legal Issues 91IFAC code of ethics relation to pref. appointment With Prospective Auditor With Existing Auditor

Additional Work Recurring & Principal Audit 97Terms for recurring audit_HTD Expert Engagement 140When to use an expert On Particular Matters which have affect on FS 141Area of using an expert Valuation of certain types of Assets Determination of Qnty or Physical condition of assets Determination of amounts using specialized methods Measurement of work completed and WIP Legal Opinions

142BSA guideline for using experts work Auditor would collect SAAE that need of an expert Should assess professional competence (Prof. Qualification, Experience, Resources of Expert) Collect SAAE about expert work to proof his value for the audit Assess appropriateness of experts work as audit evidence 143Auditors consideration before using an expert Knowledge and previous experience Risk of Misstatement based on SNCx of matter Quantity & Quality of relevant AE 144Expers competence ensuring ways

Professional Certification Experience & reputation 145When experts service can be impaired Employed by Entity Related in some manner to the entity Financially dependent or having investment with entity 146Experts scope of work Depends on matters as follows Objective & Scope of Experts work General outline of covering Intended use of experts work Extent of Expert access

Experts relationship with entity Confidentiality of Entity Info Assumptions & Methodologies used by Expert 147How to assess work of expert Consideration for assessing expert workSource data used Assumptions and methods used When the expert carried out the work Reason for any changes in assumptions and methods Results of Experts work