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I have not been able to find answers to rhe following two questions in the F8 syllabus under Planning & Risk Assessment in my open tuition notes and LSBF ACCA Text Book
1. Discuss the requirements of professional ethics and ISAs in relation to the acceptance /continuance of audit engagements.
2. Explain the preconditions for an audit
Please if I could sources to get answers to these questions above I would be most grateful.
1 Is it legal, is it ethical eg auditor is not a director of the company, no unacceptable threats to the ethical principles, are we competent? have we time? etc. These risks must be assessed with a new client then every year thereafter.
2 The preconditions for an audit are set out in ISA 210. Auditors should:
(a) Determine whether the financial reporting framework to be applied in the preparation of the financial statements is appropriate; and
(b) Obtain the agreement of management that it acknowledges and understands its responsibilities. For example, that management are responsible for the FS, not the auditors; that the auditors have a right to all explanations and documents necessary for their audit; that management is responsible for internal control and the prevention and detection of fraud.
Thank you Ken Garrett.
The answer to question 2 is clear. However, I still need a more extensive answer for question 1. Do you have any source that I could get this ?
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