INITIAL AUDIT ENGAGEMENT Auditing Help

In a first year’s audit the auditor should:

  1. Consider following matters in accepting client:

    – Integrity of management
    – Ethical and legal requirements
    – Ability to serve the client.

  2. Communicate with previous auditor The client should be asked to give permission to communicate with previous auditor. If the permission is not given the audit should not be accepted.

DOCUMENTATION OF AUDIT PLANNING\

The overall audit strategy is documented in the form of an audit planning memorandum. The planning memorandum sets out a summary of scope, reporting deadlines and audit approach along with administrative matters.

The audit plan is documented in the form of specific audit programs for each account balance and class of transactions. The audit program sets out nature, timing and extent h. audit procedures. They also contain objectives and time budget for each area.

DISCUSSION WITH AUDIT COMMITTEE AND MANAGEMENT

The auditor should discuss the audit plan with audit committee and management. He may consider changes suggested by the audit committee. However the final decision for overall audit plan and audit program rests with the auditor.

Posted on November 3, 2015 in Planning an Audit of Financial Statements

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