Para 8 of ISA 210

If the Preconditions of an Audit are not present

Discuss the matter with Management Check if:

Yes Required by law or

No
Matter regulations to
resolved? accept Proposed
Audit Engagement?

Yes
No
Para
8(b)
Auditor accepts the Proposed Audit Engagement Not
present Present
Matters in Para
6 (b) are not
present?

If both conditions meet

Only
Required by law or Yes then
regulations to
accept Proposed
Audit Engagement? Check again:
FRF is
unacceptable? FRF is
No Para acceptable
8(a)
FRF is
Auditor shall not accept the Proposed Audit Engagement unacceptable
Para
19(a)
No
No
Para Management agrees to provide such additional
20 disclosures which avoid F/S being misleading?

Check: Auditor is Yes Para

required by law or 19(b)(i)
regulation (i.e.
SECP) to undertake No Terms of Audit Engagement recognize to
Audit Engagement?
incorporate Emphasis of Matter Para in Audit
Report?

Yes Para
Yes 19(b)(ii)

Is the Auditor required by law or regulation to

express phrases “give a true and fair view” or
(a) Evaluate the effect of misleading nature of the F/S on the

(b) Include appropriate reference to this matter in Terms of

“present fairly, in all material respects” in

Auditor shall accept the Audit Engagement &

the Auditor’s Opinion?

Yes! Include such phrases.

No restrictions
The Auditor shall:

Para
19(b)(ii)
Include such
phrases
Terms of Audit Engagement recognize NOT to
include such phrases in Auditor’s Opinion?
Auditor’s Report; and

Audit Engagement.

Do not include such phrases

Auditor shall accept the Audit Engagement

Para 6 Preconditions of an Audit

(a) Financial Reporting Framework (FRF) is Acceptable
(b) Obtain the agreement of management that it acknowledges and understands its responsibility:
(i) For preparation of the financial statements as per applicable FRF
(ii) For Internal controls necessary to prepare the F/S
(iii) To Provide External Auditor with:
a. Access to all information
b. Additional information
c. Unrestricted access to persons which the auditor thinks appropriate