1 roles of audit commiittee included in the final report

> significant issue relating to the FS

> how asssesses the independence and effetivenes of external audit process
> where there is no IA function , an explanantion for absence and how assurance is achieeved
> an explanation of how auditor indepenence and objectivity are sfeguarded if proviided with non audit services by
2 management responsibility should not be done by IA dpt
3 if not given with consent then drop one client
4 every employee of audit fir is supposed to sign confidentiallity agreement onlt team memnber of Audit team
5 EP rotated after 7 years and 5 year cooling iff period
6 bookkeeping servce can not be provided to listed client
7 if matetr of public interest then allowed to inform authority and parent
8 It is unlikely that a company would reduce the number of directors to achieve a balance.
9 a ned should not be member of board for more than 9 years
10 All directors should be subject to re‐election this year
11 A Nomination Committee should be established
12 Directors contracts should be reviewed to ensure notice periods are one year or less
13 Workforce remuneration and related policies should be taken into account when setting executive directors’ remun
14 serving more than period creates familiarity threat
15 If all team is not sufficiently experienced and senior manager is faimilar with FD then different manager should app
16 Any services such as payroll and accounting for listed company should not be done as these figures will lead to FS a
17 recruitment is self interest threat as auditor will recruit members who will have impact on FS in futre
18 As per ACCA Code of Ethics and Conduct, confidential information may be disclosed when such disclosure is require
19 A self interest threat exist not intimidation as a result of overdue fee
20 As the son works as a sales manager, he is not in a position to influence the financial statements and therefore this
21 for nonn asurance activities such as fee basis of taxx services/planning is so significant o shuld not be accepted s ap
22 reviewing qualifications and assessing competence of applicants does not generally create a threat to objectivity as
23 At least half of the board, excluding the chair, must be independent non‐executive directors.
24 The board chair cannot sit on the audit committee but can be a member of the remuneration committee provided
25 Restrictions on the number of directorships a person can take are only applicable to the largest 100 listed compani
26 Independence is compromised if a non‐executive director was employed by the company less than five years ago, h
27 the request for a fixed three year contract of NED when all directors must stand for re‐election annually are both
28 rigorous annual evaluation of the performance of the board, its committees, the chair and the individual directors.
29 The annual report should describe how the nomination committee has ensured appropriate appointments have be
30 A succession plan should be in place for the board and senior management, not just the chair and chief executive.
31 remuneration committee require all member to NED while nomination is not but majority should be NED

BPP kit
32 15% revenue cap only apply to listed companies
33 Engagement partner is responsible for direction, supervision, performance and review of the audit but they delega
34 It is strength of that engagement partner is scheduled to review the communication with management aftre the au
35 board and chair should both have responsibility of liasing wih shareholder
36 There is no requirement to have internla audit department but audit committee is required annually
37 The directors should be reelected by shareholder annually not by chair
38 The directors are responsible for implementing and monitoring controls and conduct annual asessment annually an
39 The board is responsible for internal controls
40 The directors are responsible for prevention and detection of fraud
41 Internal audit function may assist the directors in this, the director ultimate retain responsibility
42 The engagement partner set out the scope of externla auditor's work
43 The audit committee monitors and review the internal audit function
44 flexibility regarding staff number in response to changing circumstances is advantage of outsourcing
45 development of skills increasing the HR strength of the entity if skill staff are employed
46 Listed companies should review the need for internal audit department at least annually , they are not autmatically
47 IA head department should report to audit committee
48 using separate teams of staff may reduce potential threat of self review but not reduce Audit Co assuming the mgt
49 The materiality amount should be effected by7 the internal audit service should be considered when evaluating sel
50 Two overall> objective
To obtainof audit of FS:
reasonable assurance about whether the financial statements as a whole are free from mate

> To report on the financial statements and communicate as required by ISAs in accordance with the aud
51 ISA and ACCA code of ethics are extenal audit reguation
52 It is company legislation that tell the requirement of audit so it aslo external audit regulation
53 IFRS are not external audit regulation as they are used in prepration of FS
54 An auditor can not insist on amendment , if mgt doesn’t agree then simly modify the audit opinion
55 Inherent limitation of audit
(1) Information is largely historical and therefore does not reflect future events or transactions
(2) Most audit evidence is persuasive rather than conclusive
(3) A substantial degree of classification and aggregation in the financial statements means that detailed
56 ISA donot override the local law and regulations as in some countries , local law mandatary to follow
57 Copliance with ISA will not automatically compliance with natioal standard
58 ISA can be used as national standard
Benefits of audit committee:
> The audit committee will provide a formal link between the auditor, the non-executive directors and t
> An audit committee can monitor and review the company’s system of internal control
> It enaes the NED to contribute independent in atter of critical importance
> It enables the board not management to delegate the etail review of audit matters
59 Providing a non - assurance service generally creates a self - interest threat due to fee income
60 Although called corporate governance, the principles are applied to many entities that are not corporations (e.g. go
61 TWO of the following are limitations inherent in having too much financial assurance responsibility handled in an a
> The full board may abdicate its responsibilities to the audit committee
> Directors who are not audit committee members may not fully grasp major accounting or risk issues
62 Inherent limitation of internal control
Human error and risk of circumvention or inappropriate management override are inherent limitation of
ded with non audit services by externla audit

memnber of Audit team

tting executive directors’ remuneration

different manager should appoint rather than resigning

these figures will lead to FS and hence create self review threat
ct on FS in futre
when such disclosure is required by law

statements and therefore this does not create significant familiarity or intimidation threats.
t o shuld not be accepted s appropriate answer than this is contingent fee and not be accepted
reate a threat to objectivity as the auditor is not making any management decisions that could cause a threat to objectivity.

neration committee provided they are not the committee chair.

he largest 100 listed companies
pany less than five years ago, has owned shares in the company within the last three years, or receives remuneration from the company ot
e‐election annually are both disadvantages to Mica taking a non‐executive director position.
r and the individual directors.
opriate appointments have been made including gender balance and diversity.
he chair and chief executive.
ority should be NED

w of the audit but they delegate the responsibilities

with management aftre the auditor's report .

quired annually

annual asessment annually and report to shareholder

 of outsourcing

ally , they are not autmatically required to have IAD

ce Audit Co assuming the mgt responsibilities

onsidered when evaluating self review threat
as a whole are free from material misstatement in order to express an opinion on them

SAs in accordance with the auditor’s findings

audit opinion

nts or transactions

atements means that detailed information is lost

datary to follow

non-executive directors and the shareholders

ternal control

t are not corporations (e.g. government, not -for-profit, NGOs).

responsibility handled in an audit committee:

jor accounting or risk issues

rride are inherent limitation of internal control (not inherent limitation of having financial responsibility handled by the audit committee).
at to objectivity.

neration from the company other than a fixed salary for the role of non‐executive director, such as a pension.
dled by the audit committee).