ACADEMY OF FINANCE
ASSURANCE 1
Chapter 2
Process of assurance:
Obtaining an engagement
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CHAPTER 2
2.3
2.2
2.1
Obtaining an Accepting Agreeing terms
engagement an engagement of an
engagement
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CHAPTER 2: OBTAINING AN ENGAGEMENT
OBTAIN AN ENGAGEMENT ACCEPTING AN ENGAGEMENT AGREE TERM OF AN ENGAGEMENT
The auditors must undertake to ensure that their PURPOSE
Advertise for clients, within appointment is valid and that they are clear to act.
certain professional guidelines.
Define clearly the extent of the firm’s
responsibilities
ACCEPTANCE PROCEDURE
Be invited to tender for an Provide written confirmation of the firm’s
audit. acceptance of the appointment
Ensure Ensure existing Communicate
professionally resources with present
qualified to act adequate auditors CONTENT OF AUDIT ENGAGEMENT LETTERS
The objective of the audit
Carry out customer due diligent in accordance with
Money Laundering Regulation 2017 The scope of the audit
The auditor’s responsibility
Check the identify of all clients before undertaking any
work The reporting framework
Management’s responsibility to FS and provide
auditor unrestricted access
The form of any reports
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OBTAIN AN ENGAGEMENT
❖Advertise for clients, within certain professional guidelines.
❖Be invited to tender for an audit.
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Advertise for clients, within certain professional guidelines.
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Accepting an engagement
Before a new audit client is accepted, the auditors must
determine whether there are any independence or other
ethical issues likely to cause significant problems with the
ethical code
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ACCEPTANCE PROCEDURES
Be invited to tender for an
audit.
Ensure Ensure Communicate
professionally existing with present
qualified to act resources auditors
adequate
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CLIENT RISK
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SOURCE OF INFORMATION
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COMMUNICATE WITH
PRESENT AUDITOR
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Worked example: Initial communication
To: Retiring NCC
Chartered Accountants
Dear Sir or Madam
Re: New client Ltd
We have been asked to allow your name to go forward for nomination as auditors of the above
company and we should therefore be grateful if you would please let us know whether there
are any professional reasons why we should not accept nomination…
Acquiring NCC
Chartered Accountants, Registered Auditors
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Accepting an engagement
The following procedures should be carried out after accepting
nomination.
• Ensure that the outgoing auditors' removal or resignation has
been properly conducted in accordance with national legislation.
• Ensure that the new auditors' appointment is valid.
• Set up and submit a letter of engagement to the directors of the
company.
• Obtain all books and papers which belong to the client from the
outgoing auditors
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MONEY LAUNDERING
5 years documentation
15,000 TRANSACTION & 5 year after cease Keep full transactions with clients
relationship
* From 2023: transactions greater than € 10,000 will take place.
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Agreeing the terms of an engagement
The purpose of an engagement letter is to:
• define clearly the extent of the firm's responsibilities and
so minimise the possibility of any misunderstanding
between the client and the firm; and
• provide written confirmation of the firm's acceptance of
the appointment, the scope of the engagement and the
form of their report.
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AGREE TERM OF AN ENGAGEMENT
CONTENT OF AUDIT ENGAGEMENT LETTERS
❖The objective of the audit
❖The scope of the audit
❖The auditor’s responsibility
❖The reporting framework
❖Management’s responsibility to FS and provide auditor unrestricted access
❖The form of any reports
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TERM OF AN ENGAGEMENT
OTHER INFORMATION
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CHAPTER 2: OBTAINING AN ENGAGEMENT
OBTAIN AN ENGAGEMENT ACCEPTING AN ENGAGEMENT AGREE TERM OF AN ENGAGEMENT
The auditors must undertake to ensure that their PURPOSE
Advertise for clients, within appointment is valid and that they are clear to act.
certain professional guidelines.
Define clearly the extent of the firm’s
responsibilities
ACCEPTANCE PROCEDURE
Be invited to tender for an Provide written confirmation of the firm’s
audit. acceptance of the appointment
Ensure Ensure existing Communicate
professionally resources with present
qualified to act adequate auditors CONTENT OF AUDIT ENGAGEMENT LETTERS
The objective of the audit
Carry out customer due diligent in accordance with
Money Laundering Regulation 2017 The scope of the audit
The auditor’s responsibility
Check the identify of all clients before undertaking any
work The reporting framework
Management’s responsibility to FS and provide
auditor unrestricted access
The form of any reports
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SUMMARY
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