Audit process overview

Question 1

client acceptance factors

Answer 1

• control factors (within control auditor, expertise, staffing, independence)
• evaluated factors (integrity, reputation, accounting practices)
• business factors (of auditor, auditor gets reasonable profitability from audit)

Question 2

client acceptance examples/steps

Answer 2

• discuss predecessor auditor
• engagement letter
• preliminary planning

Question 3

discuss with predecessor auditor

Answer 3

• reason why change of auditor
• important risks auditor needs to be aware of
• access to working papers prior auditor

Question 4

engagement letter

Answer 4

sets out roles and responsibility auditor and mangement, rules used

Question 5

preliminary planning

Answer 5

discussion on fraud, assessment special circumstances

Question 6

business risk audit

Answer 6

auditor needs to see the whole organization and its environment to understand the nature of the audit challenges (holistic approach to auditing, complete systems rather than dissection)