An assignment on case study of chapter 1 and

Course code: Auditing

Course Title: F-310
Submitted to:
Mohammad Salahuddin Chowdhury
Assistant professor
Department of finance
University of Dhaka

Submitted by:
AtiaTahira
Section-B
BBA 19th batch
ID-19-05
Department of finance
University of Dhaka

Submission Date: 17th September, 2015

Requirements:
1)
Audit firms are not allowed to do advertise for their firm. They get client through tender.in this
case this firm has no previous involvement with the unincorporated business or type like
chowdhury thats why Mr. Ahsan propose a low fee for the external audit. But he should bear in
mind about risk of the company and he should identify all the potential risky area and fee should
reflect the risk level of the company.
2)
The matters to be considered and procedures to be performed by the firm when considering
whether to tender for the external audit engagement of chowdhury for the year ending 31
December 2014 are given below:
i)
According to IFAC, before taking auditing auditor must ensure that there is no in dependency or
ethical issue. In chowdhury ltd nothing like that found.
ii)Auditor need to be appointed in a legal manner .After receiving nomination letter, need to be
ensured that whether it is valid or not whether is passed in the AGM or not.
iii) Need to ensure the existing resource adequate.
iv)Communicate with previous auditor, chowdhury LTD is doing its auditing for the first time for
it wont be possible to communicate with the previous auditor.
v) Contact with other companies or shams LTD, who are already worked with the company to
find out its management or directors nature, honesty and integrity.

3) The matters specific to the examination of and report on chowdhurys profit and cash flow
forecasts, that your firm should include in the letter of engagement were it invited to perform the
service are given below:
Engagement letter reduces the expectation gap. Terms and condition should spell out in written
form. Auditor should clearly tell to chowdhury LTd what output he is going to provide them.
Here auditor is going to audit financial statements of chowdhury Ltd. Scope of the work is Audit.
At the end of period auditor is going to provide Audit report which contains opinion of auditor
based on what is found at the time of auditing. There are some inherent limitations of accounting
policies, auditor has no control over it client understand this. Auditor must fix the deadline when
the audit report will be handed to the client. Auditor should specify what managements
responsibility and what is his. Management usually prepare financial report so for any kind of
misstatements or errors they will be liable for that .Management should provide all the document
whenever it will be asked to do so and auditor should have the access to all kind of information.
Finally fee need to be determined and have to communicate with the company through
engagement letter.

4)
According to sarbanoxely act 2006 provision, Tax is an additional service for an audit firm, it
would threat independency and interest and objectivity of audit firm.