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1. do non listed companies have TCWG ?
2. is there a maximum marks for the safegaurds for each threat ?
is it like only 1 mark for individual safeguard for every threat ? or are there limitations to that
3. how internal audit department in the firm can help the audit firm to reduce the audit fee ? is it possible ?
for number 2, it means where there are maximum marks for the safeguards for every threat
1. All organisations have someone or a body of people that fulfils the role of “TCWG”. Many larger companies that are not listed will follow corporate governance best practice and have a separate audit committee to fufil the role of TCWG – but if they don’t – the board is “charged with governance”. For a small business, an owner-manager may be TCWG.
2. If you have a question like “Comment on the ethical and professional issues … and
recommend any actions” – I think you can be sure that there are more marks to be obtained for the issues than for the actions (which would include safeguards). So if it was 8 marks, I would aim for 5/3 mark split. There may be only a couple of good (i.e. relevant) safeguards for each threat.
3. An internal audit function in the client entity can help reduce the audit fee. In the absence of context I don’t understand your reference to “in the firm”.3. that firm refers to the client firm. But how can internal audit department help to reduce the audit fee when it’s the audit firm that performs that carry out the audit not the internal audit firm ? is there some examples (Actions) that internal audit department can do to reduce the audit fee ?
For clarity I recommend that you write client, entity or company to mean the audit client – and reserve “firm” to mean the audit firm.
It is assumed knowledge of AA (F8) that the external auditor may rely on the work of internal audit (ISA 610 Using the Work of Internal Audit). If a client has a good IA function doing relevant work, the external auditor can use (rely on) IA’s work to reduce their own work. Good examples are if IA tests the operating effectiveness of internal controls or attends inventory counts. For clients with inventory in numerous locations, it is common for IA and the external auditor to plan to attend different locations so between them they achieve a higher coverage.
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