June 2011 #4

Hello sir, I am having some problems with part (a) and (c) of this question.

Part A:
In this part I mentioned everything except:
– notifying Goofy Co and Mickey Co
– clear guidelines on security and confidentiality.

Will I loose marks?

Part C:
I found this line in the scenario to be a threat when I read it in my mind, “If NAB & Co is appointed as internal and external auditors”.

Threat- NAB & Co “may” be both internal and external auditors of the client. This is a self review threat if NAB & Co uses 1 team to be the internal and external auditors.

Safeguard- If NAB & Co does in fact become both internal and external auditor, they should ensure different teams are used.

However, this was not in the examiner’s answer. Is this wrong?

Finally, I have a general query. How long should a key audit partner also known as the engagement partner should be on the audit team for a “listed company” and for a “company does that is not listed”?

Thank you!