Preconditions for an audit

Preconditions for an audit include management’s use of an acceptable financial reporting framework and its agreement to acknowledge specified responsibilities, including preparing the statements, maintaining necessary control and providing access to information and persons. The auditor assesses whether these conditions are present before accepting an engagement. The auditor also determines whether management understands its responsibility for necessary internal control and unrestricted access to relevant information. If preconditions are absent, acceptance is generally inappropriate unless applicable law or regulation requires otherwise.