1.

Obtaining an engagement (CH2)

Hand note:
Year Q Question Mark Practice
No s (Yes/ No)
June 5 You own an accounting firm. XYZ Ltd. Is your prospective client. However, it
2010 declines permission to contact the previous auditors, what should be your course of
action?
Dec 2 You own an accounting firm. XYZ Ltd. Is your prospective client. However it declines
2001 permission to contact the previous auditors, what should be your course of action?
June 7a What are the factors a practitioner must consider before accepting an assurance
2012 engagement
May 1c The code of ethics of ICAB and IFAC sets out some rules under which auditors
2013 should accept new appointments.
What procedures should the new auditors follow to comply with the above set of
rules?
Dec 1d ICAB and IFAC Code of ethics set out the rules under which auditors should accept
2016 new appointment. What procedures should the new auditors follow to comply with
the above set of rules?
June 1d Before accepting an engagement an auditor must carry out minimum procedures to
2017 make sure that he would be able to accomplish the whole assignment in a very high
quality professional standard. What are those procedures an auditor must carry
out?
Year Q Question Mark Practice
No s (Yes/ No)
June 7a What are low risks and high risks for assurance?
2012
May 1d The audit firm considers whether the client is likely to be high or low risk to the firm
2013 in terms of being able to draw an appropriate assurance conclusion in relation to
that client.
Distinguish between two clients considering high and low risk.
Contents of engagement letter:

1. The objective of the audit of financial statements.

2. Management's responsibility for the financial statements

3. Auditor's responsibility in connection with the audit.

4. The engagement letter must document and confirm the auditor's acceptance of the appointment

5. The scope of the audit, including reference to applicable legislation, regulations, or pronouncements of
professional bodies to which the auditor adheres.

6. The form of any reports or other communication of results of the engagement.

7. Intimating the fact that because of the test nature and other inherent limitations of an audit, together
with the inherent limitations of any accounting and internal control system, there is an unavoidable risk
that even some material misstatement may remain undiscovered.

8. Unrestricted access to whatever records, documentation and other information is requested in

connection with the audit.

9. Expectation of receiving from management written confirmation of representations made in

connection with the audit.

Should a practitioner send an engagement letter to existing clients?

-June 2012(7b)
Past Questions:
Year Q Question Mark Practice
No s (Yes/ No)
June 4 What forms and contents will normally be contained in a letter of engagement?
2010
June 2 Which three of the following will normally be contained within a letter of 6
2011 engagement?
Responsibilities of the auditors;
Responsibilities of the directors;
The scope of the audit;
The staff assigned to the engagement;
Dec 1 What forms and contents will normally be contained in a letter of engagement?
2011
June 7b What are the purposes of an engagement letter? Should a practitioner send an
2012 engagement letter to existing clients?
Dec 1b Write down the purpose of issuing audit engagement letter. Discuss the situations
2012 where it is necessary to issue audit engagement letter each year even for repetitive
audits.
May 3a The form and contents of audit Engagement Letter may vary for each client, but
2013 they would generally include some basic contents.
Write in brief those basic contents of an Engagement Letter.
May 3a What are the objectives of Audit Engagement Letter?
2014
Dec 5 Write down short notes on following terminology:
2014 a) Operational Audit.
b) Advocacy Threat.
c) Audit Engagement Letter.
June 4a i) What are the objectives of Audit Engagement Letter?
2017 ii) Write in brief the basic contents of an Audit Engagement Letter.