Comparison between Audit engagements and assurance engagements:

Audit:
External audits provide reasonable assurnace expressed positively, where the auditor
provides an opinion whether the financial statements are true and fair.

They are required under the companies act.

Assurance engagements give limited assurance expressed negatively, concluding

"Nothing has come to our attention".

Reviews are typically optional.

reviews are generally limited to analytical procedures and enquires.

General safeguards:
- Call ICAEW helpline

- Engagement Quality review (All listed companies must have one

- Consult the ethics partner

- Document everything

Communicate those charged with governance.

Benefits of assurance: Audit thresholds:

- Familiarises the firm with the audit process when they eventually need one > 10.2m revenue

- Helps the firm get a loan from the bank. > 5.1m gross assets

- Increased credibility on the subject matter > 50 employees

- Directors look better as FS are under scrutiny.

- Support to the firm in the form of reccomendations via identifying deficiencies.

13.1

- Assessment of the internal audit function is appropriate

- Staff are skilled and competent.
- Junior work is properlly reviewed and supervised.
- sufficient, appropriate evidence is obtained.
- Consclusions are appropriate.
- reports are consistent with the work performed.

- Any exceptions or unusual matters are disclosed by the internal audit committe.
Audit thresholds:

> 10.2m revenue

> 5.1m gross assets

> 50 employees
Revaluations Going Conern:
- receieve profit and cash fl
Valuations and estimates are complex and subjective. Review their ability to pay d
Econonomic conditions may not be reflective of the actual value due to volatility. perform sensitivity analysis
company may not have revalued all assets in the same class. Must revalue all obtain future plans and ass
properites! review post year end mana
obtain a letter of comfort f
Incorrect journal entries may be posted.
Depreciation may not be on the remaining useful life.
Going Conern:
- receieve profit and cash flow forecasts.
Review their ability to pay debts as they fall due.
perform sensitivity analysis on it
obtain future plans and assess feasibility
review post year end management accounts.
obtain a letter of comfort from the director.