l2 : audit acceptance & planning

Question 1

what are the 5 fundamental principles as outlined by the IESBA?

Answer 1

Competency
Objectivity
Professional behaviour
Integrity
Confidentiality

Question 2

explain competency as a fundamental principle.

Answer 2

should maintain professional knowledge and skill at a level to ensure clients get competent service

Question 3

explain objectivity as a fundamental principle.

Answer 3

should not allow bias, conflicts of interest or undue influence to impact professional judgement

Question 4

explain professional behaviour as a fundamental principle.

Answer 4

ensuring all relevant laws & regulations are being followed. avoid any action that discredits profession.

Question 5

explain integrity as a fundamental principle.

Answer 5

should be straightforward and honest in all professional relationships

Question 6

explain confidentiality as a fundamental principle.

Answer 6

must respect confidentiality of info gained through professional relationships. should not disclose to 3rd parties without specific authority.

Question 7

what are the 3 stages of accepting and planning the audit?

Answer 7

1. client screening
2. preconditions (mgt agree premise on which the audit on conducted)
3. after client accepted (gain permission from client to be auditor)

Question 8

what is the purpose of internal audit?

Answer 8

• review and test internal controls
• review accounting systems
• prepare & process documents
• fraud investigations
• supply chain investigations (MDS)