What factors should an auditor consider prior to accepting an engagement prior to accepting a client the auditor should?

Table of Contents

• 1 What factors should an auditor consider before accepting a company as an audit client?
• 2 Which is the 4 steps in accepting an audit engagement?
• 3 What factors should an auditor consider?
• 4 What is helped in preparing audit report?
• 5 What does an auditor do and do not do?

Discuss the factors an auditor should consider before accepting a company as an audit client. Answer: The auditor should investigate and consider the prospective client’s standing in the business community, financial stability, management’s integrity, and relations with its bankers, attorneys, and previous CPA firm.

What kind of things an auditor should consider before accept the engagement?

They should include the following:

• The objective and scope of the audit;
• The responsibilities of the auditor;
• The responsibilities of management;
• The identification of an applicable financial reporting framework; and.
• Reference to the expected form and content of any reports to be issued.

What are the major factors that should be considered before accepting the client?

Client acceptance evaluation should include General Considerations, Management Integrity, Management Commitment to GAAP, Management Internal Control Consciousness, Financial Strength of the Client, and Other Risk Factors.

Which is the 4 steps in accepting an audit engagement?

Steps of an Audit Engagement

• Pre-Engagement Activities in Auditing. Prior to actually beginning an audit, there are several important steps.
• Audit Engagement Process. Once the auditor has been formally retained by the client, substantive audit planning can begin.
• Role of Fieldwork.
• Concluding the Engagement.

Why should an auditor who is accepting a new engagement investigate the prospective client?

Accepting new audit clients ‘ This means that when approached to take on a new client, the firm should investigate the potential client, its owners and business activities in order to evaluate whether there are any questions over the integrity of the potential client which create unacceptable risk.

What should an auditor consider in developing the audit objectives of a particular engagement?

To plan the engagement effectively, internal auditors should start by understanding the context and purpose of the engagement, why it was included in the annual internal audit plan, and how the organization’s mission, vision, strategic objectives, and other elements align with those of the area or process under review.

What factors should an auditor consider?

The auditor should evaluate the client’s standing in the business community, financial stability, and relations with its previous CPA firm. The primary purpose of new client investigation is to ascertain the integrity of the client and the possibility of fraud.

What should I do before an audit?

Steps to Prepare for an Audit

• Plan ahead.
• Stay abreast of new accounting standards.
• Review your previous audits.
• Create a timeline and assign tasks.
• Get your documentation organized.
• Ask questions.
• Make yourself available.
• Self-evaluate.

What are the objectives of the auditor when she he accepts the audit engagement of a company?

The objective of an audit is to form an independent opinion on the financial statements of the audited entity. The opinion includes whether the financial statements show a true and fair view, and have been properly prepared in accordance with accounting standards.

What is helped in preparing audit report?

This chapter has discussed aspects of the preparation and presentation of an auditor’s report. It identified six elements that an audit report should contain, including the report designation/title, the statement of purpose, the statement of scope, the statement of findings, and the signature/date.

What factors should the auditor consider when determining what to include in his or her working papers?

Factors affecting the auditor’s judgment about the quantity, type, and content of the working papers for a particular engagement include (a) the nature of the engagement, (b) the nature of the auditor’s report, (c) the nature of the financial statements, schedules, or other information on which the auditor is reporting …

When does a nonprofit organization need an audit?

Circumstances that may trigger the requirement for an independent audit include: Federal, state, and local governments may request a copy of the organization’s audited financial statements. Charitable nonprofits that expend $750,000 or more in federal funds in a year are subject to special audit requirements.

What does an auditor do and do not do?

It is important for a company’s management to understand exactly what an audit is – and what an audit does and does not do. The auditor’s responsibility is to express an independent, objective opinion on the financial statements of a company.

What should an internal auditor do during a financial statement audit?

D) the prospective client’s consent to make inquiries of the predecessor, if any. During a financial statement audit an internal auditor may provide direct assistance to the independent CPA in performing. A) consider the policies that prohibit the internal auditors from auditing areas where they were recently assigned.

What should the Auditor do if the predecessor accepts the engagement?

The auditor should communicate with the predecessor to determine whether to accept the engagement (AU-C 210). If the engagement is accepted, the audit may be facilitated by making specific inquiries of the predecessor and by reviewing the predecessor’s audit documentation.

What factor should an auditor consider prior to accepting an engagement?

What factors should an auditor consider prior to accepting an engagement explain why auditors need an understanding of the client's industry?

What factors should an auditor consider?

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