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Auditing Process

The auditing process begins with a pre-engagement phase that involves client investigation to assess their suitability, including factors like fees, integrity, and previous auditor relationships. It also requires determining the skills and competencies of the audit team and agreeing on engagement terms through a signed engagement letter. This letter outlines the nature of the engagement and the responsibilities of all parties involved.

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3 views1 page

Auditing Process

The auditing process begins with a pre-engagement phase that involves client investigation to assess their suitability, including factors like fees, integrity, and previous auditor relationships. It also requires determining the skills and competencies of the audit team and agreeing on engagement terms through a signed engagement letter. This letter outlines the nature of the engagement and the responsibilities of all parties involved.

Uploaded by

jdsowman
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Auditing process

1. Pre-Engagement

• Client investigation – Do we want the client


o Fees – whether they can pay the fees
o Integrity of the client – how honest and truthful are
o Business standing risk
o Risk of material misstatement
o Ethics
o Predecessor auditors – previous auditors. Ask why they left
o Attitude – type of attitude of the client
o Legal vacancy – has to do with lawyers and why they don’t want to take
the case
o Scope limitation – not enough information
• Determine the skills and competencies – Can we take the client
o Skills and competencies – come with time
o Knowledge and experience –
o Ethics –
o Members of the team-
o Deadline – could be possible intimidation threat
• Determining and agreeing to engagement term – signed engagement letter

A signed engagement should include:


The nature of the engagement
The responsibilities of the parties involved in the engagement

An engagement letter must be issued:


For all new engagements
For all existing clients - changes to the engagement

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