ACA Assurance
1. What are the 5 key elements
CREST
of an assurance engagement?
Criteria
Report
Evidence
Subject matter (the thing being checked)
Three party relationship
2. What are the auditor
MANICS
appointment considerations
Management Integrity
before acceptance of an
Adequate Resources
engagement?
Nature of Engagement (level of risk)
Identification
Communicate with previous auditor
Stability
3. What is the letter of engagement? Sets out the objectives, scopes and
responsibilities
of the audit. It outlines the reporting framework
and the form of any reports or opinions which
may be given.
4. What are the key contents of the ADDS TO FIRMS Fees
en- gagement letter? Auditors' responsibilities
Directors' responsibilities
Directors' representations
Scope and objectives
Terms agreed
Other services
Fraud (clarifying that directors are responsible
for detecting fraud)
Irregularities
Report to management
, ACA Assurance
Management of the audit (timings)
, ACA Assurance
Specialists (may be required to value large or
un- usual assets)
Fees
5. Define audit risk The risk that the auditor expresses an
inappropri- ate audit opinion when the financial
statements are materially misstated.
AR = IR X CR X DR
6. What are examples of inherent risk? - Complex calculations
-Estimates in transactions
-The business may be under pressure to
produce good results e.g., directors'
bonuses
-External circumstances giving rise to
business risks
7. What is included in the audit -Information about the client's industry
strate- gy? -Scope of the audit
-Identification of specific audit risks
-Size of the audit team, requirement to use
special- ists
-Management, direction and supervision
of the audit team (timing of briefing
meetings, partner reviews, manager visits)
8. What is included in the audit plan? - More detailed than the audit
strategy
-Nature, timing and extent of the specific
audit pro- cedures required for each material
class of transac- tions, account balance or
disclosure
, ACA Assurance
9. Under ISA 315 (Identifying CRIME
and as- sessing the risks of Control activities
material mis- Risk assessment process of the entity
1. What are the 5 key elements
CREST
of an assurance engagement?
Criteria
Report
Evidence
Subject matter (the thing being checked)
Three party relationship
2. What are the auditor
MANICS
appointment considerations
Management Integrity
before acceptance of an
Adequate Resources
engagement?
Nature of Engagement (level of risk)
Identification
Communicate with previous auditor
Stability
3. What is the letter of engagement? Sets out the objectives, scopes and
responsibilities
of the audit. It outlines the reporting framework
and the form of any reports or opinions which
may be given.
4. What are the key contents of the ADDS TO FIRMS Fees
en- gagement letter? Auditors' responsibilities
Directors' responsibilities
Directors' representations
Scope and objectives
Terms agreed
Other services
Fraud (clarifying that directors are responsible
for detecting fraud)
Irregularities
Report to management
, ACA Assurance
Management of the audit (timings)
, ACA Assurance
Specialists (may be required to value large or
un- usual assets)
Fees
5. Define audit risk The risk that the auditor expresses an
inappropri- ate audit opinion when the financial
statements are materially misstated.
AR = IR X CR X DR
6. What are examples of inherent risk? - Complex calculations
-Estimates in transactions
-The business may be under pressure to
produce good results e.g., directors'
bonuses
-External circumstances giving rise to
business risks
7. What is included in the audit -Information about the client's industry
strate- gy? -Scope of the audit
-Identification of specific audit risks
-Size of the audit team, requirement to use
special- ists
-Management, direction and supervision
of the audit team (timing of briefing
meetings, partner reviews, manager visits)
8. What is included in the audit plan? - More detailed than the audit
strategy
-Nature, timing and extent of the specific
audit pro- cedures required for each material
class of transac- tions, account balance or
disclosure
, ACA Assurance
9. Under ISA 315 (Identifying CRIME
and as- sessing the risks of Control activities
material mis- Risk assessment process of the entity
