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Which three areas would you investigate further as a result of carrying out analytical procedures
on the above?
Assurance engagements are designed to enhance intended users degree of confidence about the
outcome of the evaluation or measurement of a subject matter against criteria. Auditors shall conduct
the audit of the financial statements of an entity with integrity, objectivity and independence.
Engagement personnel shall promptly notify the team leader of circumstances and relationships that
create threats to relevant ethical requirements. The engagement leader then in consultation with the
engagement partner will propose a resolution by applying the framework for resolving threats to
their assurance engagement.
a) What do you mean by integrity, objectivity and independence in assurance engagement?
c)
The ABC & Co., an audit firm, is currently in the process of accepting a new client. A review
team is considering a number of ethical issues that might hinder acceptance. Write down the
meaning, threat type and applicable safeguards for the following threats as per following format:
3x6= 18
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Threat
Some firms tendered low
billing
Assurer provides valuation
service to same client
Assurer recruits senior
management for the client
The client is proposing for a
contingent fee
Client threatens to sue the
assurance firm
Assurer accepts gifts and
hospitality from the client
5.
Meaning
Threat Type
Applicable Safeguards
Internal control is a process affected by an entitys structure, environment work, authority flows,
people and management information systems. Internal Control System is designed to help the
organization accomplish specific goals or objectives. By ensuring effective and efficient Internal
Control System an organization's resources are directed, monitored and measured which eventually
plays an important role in preventing and detecting fraud and error.
a)
b) (i) What are the objectives of implementing Internal Controls System (ICS)?
c)
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