Recurring Audit

Question 1

Recurring audit

Answer 1

Here are the smart notes:

Recurring Audits

• Initial engagement letter may state that its provisions apply to all future annual audits.
• ISA 210 requires auditors to assess whether:
  
  1. Circumstances require revising the terms of engagement.
  2. Management needs reminding of existing terms.

Factors Indicating Need for Revision or Reminder

1. Indication of entity’s misunderstanding of audit objective and scope.
2. Revised or special terms of audit engagement.
3. Recent change in senior management.
4. Significant change in ownership.
5. Significant change in nature or size of entity’s business.
6. Change in legal or regulatory requirements.
7. Change in financial reporting framework.
8. Change in other reporting requirements.