(i) Example

Brief outline of Weston & Co

Weston should include a brief description of the firm including different services offered and the
location of its branches including overseas location. This is because, Jones Co plans to open their
branches overseas and definitely is looking for audit firm that can provide services locally and overseas.

Besides, firm can also include any specialism which the firm has in auditing recruitment companies.
(1.5m)

Identify the audit requirements of Jones Co

Weston Co should outline the statutory audit requirement in the country where Jones is operating in, to
confirm that the company is now at a size where it is necessary to have their F/S being audited. Since
this is the first time an audit is required, duties of management and auditors in respect of audit should
also be explained. (1.5m)

(ii)

Cost of providing the service

First, the audit firm should consider costs of providing the audit service. This will include costs of audit
team based on the number of seniority of members involved and the amount of time spent. Besides, if
the audit needs an engagement of experts, this cost should also be included. (1m)

Weston will have the standard charge out rates ie. grade of staff x hours x rate/hour and this will help to
estimate the total fee. Other costs should also be considered such as travelling and accommodation
costs if necessary. (1m)