Audit correspondence types
Professional clearance Letter
·
By proposed Auditor
·
to Predecessor Auditor
·
Before Acceptance of audit client to debate whether
there's any professional reason due to which engagement shouldn't be accepted.
Engagement
Letter
·
To Management
·
At the start of the engagement
·
Appointment Letter corroborates receipt and appointment
of an auditor.
Confirmation
Letter
·
By Auditor
·
To External Parties
·
During Audit to get information about the entity from
outside parties.
Representation
Letter
·
By Management
·
To Auditor
·
Near the top of the audit
·
It reminds management about their responsibility for the preparation of monetary statements and for the completeness of data provided to the auditor.
·
By Auditor
·
To Members (or TCWG)
·
At the top of the audit, The audit report expresses
opinions on financial statements.
Organization
Letter/ Letter of weak point Auditor Administration After the Audit Report It contains:
·
identified weaknesses in control
·
risks due to weakness in control, and proposals to
enhance
The distinction
between audit and audit-related services;
An audit may be a sort of assurance engagement. the target of an audit is to enable the auditor to make an opinion on whether the financial statements of an entity provide a ‘true and fair view’.
An audit is
meant to supply a high level of assurance to the users of the financial statements.
In contrast,
audit-related services don't provide an equivalent high level of assurance, and
in some cases don't provide any assurance.
Audit-related
services are performed
by practitioners and include engagements such as:
·
Reviews of knowledge. Reviews of knowledge are checks
administered on information prepared by another person.
·
They supply a moderate level of assurance that the
knowledge under review is freed from material misstatement.
·
Agreed-upon procedures. this is often an engagement
where the party hiring the practitioner specifies the procedures that the
practitioner should follow when performing the assignment.
·
Compilations. The practitioner is engaged to organize
information, instead of auditing information prepared by somebody else. for
instance, an accountancy firm could also be engaged to organize a tax
computation for a client.
Informing the…
End on the
financial declarations, the practitioner shall:
·
Appraise whether the financial declarations sufficiently
ask or describe the applicable financial coverage framework.
·
Consider whether within the framework of the wants of
the applicable financial reporting structure and therefore the results of measures
performed:
(i) The terminology utilized in the budget
s including the title of every financial statement is appropriate.
(ii) The financial declarations sufficiently
disclose the many accounting guiding principle selected and useful.
(iii) The accounting policies selected and
applied are according to the applicable financial reporting framework and are
appropriate.
(iv) Accounting approximations made by administration
appear sensible.
(v) The information presented within the
financial declarations is visible pertinent, reliable, analogous, and comprehensible.
(vi)
The financial declarations supply sufficient disclosures.
The
Practitioner’s Report
The
practitioner's story for the review appointment shall be in writing, and shall have
the subsequent constituents:
a)
A title of the report
b)
The addressee(s),
c)
An introductory paragraph that:
·
Identifies the financial statements reviewed,
including identification of the title of every one of the statements contained;
·
Refers to the summary of serious accounting policies
and other explanatory information.
·
States that the financial statements are reviewed.
a)
An outline of the responsibility of management for the
preparation of the financial statements.
b)
An outline of the practitioner's responsibility to
precise a conclusion on the financial statements including regard to this ISRE
and where relevant, applicable law or regulation
c)
an outline of a review of monetary statements and their
limitations, and therefore the following statements:
·
A review engagement under this ISRE may be a limited assurance
engagement;
·
The practitioner performs procedures, primarily
consisting of creating inquiries of management et al. within the body, as suitable,
and relate analytical actions, and assesses the confirmation obtained.
i.
The processes execute during an appraisal are considerably
but those execute in an audit behavior in agreement with International
Standards on Auditing (ISAs), and, therefore, the practitioner doesn't express
an audit option on the financial declarations
ii. A review engagement under this ISRE may be a limited
assurance engagement;
iii.
The practitioner performs procedures, primarily
consisting of creating inquiries of management et al. within the article, as suitable,
and applying analytical measures, and assesses the proof obtained.
iv.
The measures execute during a review are considerably
but those carry out in an audit conducted in agreement with International
Standards on Auditing (ISAs), and, therefore, the practitioner doesn't express
an audit option on the financial declarations;
a)
A paragraph under the heading "Conclusion"
that contains:
·
The practitioner conclusion on the financial
statements as an entire
·
A regard to the applicable financial reporting
framework wont to prepare the financial statements,
·
When the practitioner’s end on the monetary declarations
is modified
b) A
paragraph under the acceptable heading that contains the practitioner's
modified conclusion
A stare to
the practitioner's compulsion under this ISRE to suits applicable ethical obligations;
·
The date of the practitioner's account.
·
The practitioner's mark.
· The situation within the authority where the practitioner practices.