©Tony Surridge Online Limited, 2010
What youneed to know
BEFOREYOUSTARTBefore you get involved in the audit work itself, you must be aware of thebackground requirements. In essence, you must know and actaccording to:
of the audit
that you will use (your firm has adopted theInternational Auditing Standards issued by the IAASB)
code of ethical behaviour
of your professional body (you arean accredited member of the ACCA)
procedures and rules of your accounting firm
.This is no problem for you. You are a professional accountantaccredited by ACCA.
the client ….. Acceptance
This is the first step on your journey through the audit. In this phase of theaudit you will have two objectives:(i) To examine GSM (the client -who the International Auditing Standardsrefer to as ‘entity’) to determine whether there is any reason to rejectthe engagement. In others words,
do we want the audit engagement?
(ii)On the basis that you
want to obtain the audit engagement
toconvince GSM to employ your firm
.This first step involves six procedures:1. Determine whether your accounting firm is
able to meet the ethicalrequirements
regarding the client.2. Determine whether your firm will need to employ the
work of otherspecialists or experts
as part of the audit.3.
Communicate withpredecessor auditor
. (Not in this case because itis a ‘first’ audit.)4.
Select the staff who will form the audit team
and consider the auditcosts and budget.5. Prepare a
.6. Prepare and obtain an
which will only be issuedwhen the client agrees to your proposal.
An overview of what is involved inPaper F8 …… (2 of 4)