What is the purpose of engagement planning What critical information should the auditor consider during engagement planning How will this information affect the scope of the audit The purpose of engagement planning is to ensure that both the auditor possesses the knowhow and capabilities needed to address the client s needs and that the client is of integrity and has not imposed any restrictions that may cause the auditor to issue an unqualified opinion During the engagement planning process the auditor should assess several areas of the company s operations and prior activities Most notably the auditor should evaluate the integrity of the company s management communicate with the predecessor auditor make inquiries of other third parties review previous experiences with existing clients identify special circumstances and unusual risks identify intended users of audited financial statements assess the company s client s legal and financial stability identify scope limitations evaluate the company s financial reporting systems and of course the auditor should at some point ask the potential client exactly what services are desired http www phxaccountant com audit engangement planning 2010 06 Reference Response 2 What is the purpose of engagement planning The purpose of engagement planning is to ensure that the auditor is knowledgeable and capable of addressing the clients needs It also ensures that the client is of integrity and has not imposed restrictions which can cause the auditor to issue an unqualified opinion in the audit What critical information should the auditor consider during engagement planning The auditor should asses several areas of a companies operations and the companies prior activities The auditor should also evaluate the clients integrity and communicate with the previous auditor and inquire to third parties and identify special circumstances How will this information affect the scope of the audit If financial statements of a company being audited are not true this could cause the auditor to be unable to asses the companies current position References www phxaccountant com audit engagment planning 2010 06
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