Audit Engagement & Fraud

HideShow resource information
Describe the exemptions, where directors can appoint the auditors?
Before company's first period for appointing auditors, to fill a casual vacancy, following the period in which the company did not have an auditor.
1 of 14
Whom may also appoint an auditor should neither the shareholders or directors?
Secretary of state (government) but this is rare.
2 of 14
What ISA governs audit engagement?
ISA 210
3 of 14
What is the primary purpose of the letter of engagement?
To define the auditors responsibilities. Minimise misunderstandings, in particular with new clients.
4 of 14
What are some common misunderstandings of audit work?
Report to shareholders not directors, fraud detection primary responsibility of management/directors, true and fair view.
5 of 14
What must audit firms ensure when providing 'other services'?
Charge separately for the audit & 'other services', adherence to independence guidelines, separate engagement letter stating 'other service' to be provided.
6 of 14
When should the engagement letter be sent?
After verbally accepting appointment, BEFORE any audit work commences.
7 of 14
Which ISA governs fraud?
ISA 240
8 of 14
Define fraud?
The use of deception to obtain an unjust or illegal advantage or intentional misrepresentations.
9 of 14
Who formed the 'conditions for fraud' triangle?
Donald Cressey.
10 of 14
What are the conditions for fraud according to the triangle?
Perceived opportunity, pressure, rationalisation.
11 of 14
Define error?
An unintentional mistake.
12 of 14
Who has primary responsibility for the detection of fraud?
Management/directors.
13 of 14
What are some of the characteristics of fraud?
Misstatements in the FT's, fraudulent reporting/misappropriation of assets, higher detection risk, management fraud.
14 of 14

Other cards in this set

Card 2

Front

Whom may also appoint an auditor should neither the shareholders or directors?

Back

Secretary of state (government) but this is rare.

Card 3

Front

What ISA governs audit engagement?

Back

Preview of the front of card 3

Card 4

Front

What is the primary purpose of the letter of engagement?

Back

Preview of the front of card 4

Card 5

Front

What are some common misunderstandings of audit work?

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Accounting resources:

See all Accounting resources »See all Audit and Assurance resources »