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Could you please tell me if i understand this correctly.
1) firm needs to satisfy isqc1 ie competence, objectivity and client integrity.
After ‘clinet’ is accepted
2) engagement letter is to be issued for audit or limited assurance engagement.
So technically 2 procedures
First is client acceptance and 2nd is work acceptance.
Am i understanding this correctly?
Thank you so much for your reply in advance.
I quite like that as an idea but the nature of the work cannot be separated from the client. So when you accept the client, you’re accepting the work too – the engagement letter is the contract which formalises the acceptance.
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can i say firm is satisfied with isqc1 and they then go for a tender then engagement letter? What is the order?
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And do you mean that for each tender they have their own purpose? Like audit tender and review tender are different things?
So tender is not about client acceptance but about client acceptance AND particular purpose?
What happen if existing audit client wants review engagement. Will audit firm issue new tender or only engagement letter?
Thank you so much..
See page 18 of the notes. Putting something “out to tender” means that the business invites potential providers of goods or services (in the case of audit, etc) and the provider of the goods/services responds to the “ITT” (invitation to tender). The business selects a short-list from which it chooses the provider. A firm would check that it can provide the service within practical and ethical constraints before responding to the ITT (it would make no sense to respond and then, if selected, say “sorry can’t do it”).
Tender is from the prospective client – not the audit firm.
Not all professional services will be put out to tender – it is a costly process. However, it is good governance practice for public interest entities to put the audit out to tender after 10 years.
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Thank you so much 🙂
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