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respected sir,
Q:whether auditors decide before engagement the fee for the audit or whether they decide after knowing the amount of work to be carried out by the auditors as performing full substantive procedures because the company’s controls are not effective enough, and sir if there is a need for some other independent review such as of jewellery would his fee also be included in the audit fee or company separately would pay it?
Q: sir you said to identify potential problems for planning audit you should look at last year audit file for any issues before , but sir if it is our first audit to the client would we ask the previous auditor to give us the audit file?
Q: as we would be checking the internal controls on september than what would be be doing in previous 9 months?
Q: sir performance materiality ?
Q1. Clients will obviously want an estimate, but this if more audit work than expected is needed, a lsrger fee is negotiated.
Q2. No, though any information the old auditor chooses to provide is welcomed. This is why audit risk is higher for the first audit: auditors have no previous experience of the client.
Q3. Working on other clients, holidays, training, non-audit work etc
Q4. Performance materiality is fully explained in our notes and lectures.
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