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Condentiality

Correct FR framework

Integrity

For FS prepared using appropriate FR framework Fundamental principles (CIO, PP) For IC

Objectivity

Knowledge and Skill Professional Competence and Due Care

Access to all info

Mgmt agrees to be responsible

Preconditions for Audit

Act diligently

Additional info needed

Provide auditor

Professional Behaviour

Unrestricted access to persons for evidence

Self-Review

Unless law/regulation

If not met, don't accept

Intimidation

Deterred from acting objectively

Acceptance

Advocacy

Objective and scope Purpose Auditor's responsibilities

Ethical Threats (SIA, FS) Familiarity

Sympathetic

Audit client familiar with audit procedures

Report to be issued ***Independence and Code of Ethics Objective Engagement Letter Mgmt's responsibility Self-Interest

Financial

Audit fee

Personal

Family member

ListCo: accounting, accg system, internal audit

Report form Non-audit service Scope of audit using SSAs and CA Prohibited if

Valuation: if material and subjective

Corporate Finance: helping to sell shares

Inherent limitation of audit (can't discover all material errors) Content Dependent Provide access to auditor to relevant records

Recruitment: CEO/CFO/senior accg position

Planning the audit

APPOINTMENT

Independence Rules Fee

Overdue

Contingent Mgmt representation letter required Lowballing Request client conrmation of terms Close relationship with client Fee calculation and billing arrangements Gift/hospitality Prior to commencing audit Timing Other situations Perceived/threatened litigation Discuss why with mgmt and explain need Client refuses to sign If still refuse, consider withdrawing Fee to cover cost and risk Aware of any matter Purpose why shouldn't accept engagement Expertise needed Approval to communicate with existing auditor Competence and Due Care Sufficient time Permission refused: decline appointment Competing with rm Permission granted: write to existing auditor Professional Clearance Procedure Matters to Consider (FOCC, IRR) Conict Of Interests Direct competitor of existing client Other Services High enough

Evaluate reply: can still accept despite problems Steps

Direct conict with existing client (lawsuit)

Decide and inform entity of decision to accept/ reject appointment

Independence No response from existing auditor: try other means of communication Risk If didn't bother to respond Still no reply: send nal letter to existing auditor informing of decision to accept appointment Lodge complaint with professional body Resource Size

Relationships or situations

Professional Clearance Procedure

Management integrity

Opinion shopping

Timing