Can auditor agree to change the terms of audit engagement after initial acceptance during engagement?
Normally the change is neither requested nor required by the client in the terms of audit engagement once they have been agreed at the start. The reason is that terms are agreed upon after detailed discussion and giving proper thought both by the auditor and client. But circumstances may arise in which client may think […]
How can auditor overcome inherent limitations of an audit engagement?
Auditors or practitioners conduct audit and other assurance engagements under certain limitations which are commonly known as Inherent limitations of an audit (assurance) engagement. It is these limitations that restricts the auditor to gain absolute assurance i.e. financial statements are absolutely free of misstatements. International Standards on Auditing ISAs because of these limitations recognize that […]
Why auditor cannot provide Absolute level of assurance in audit engagement?
According to International Standards on Auditing ISAs, auditor is required to obtain reasonable assurance whether financial statements give true and fair view or in others words he must be reasonably sure that financial statements are free from material misstatements. Again, I must emphasize he needs to be reasonably sure and NOT absolutely sure. There is […]
What is assurance engagement?
Assurance engagement is an engagement performed by a practitioner to enable himself to express an opinion about the measurement of subject matter against a criteria. Practitioner’s expression of opinion raise the confidence of the users over the measurement as to whether measurement of subject matter is a fair statement keeping the criteria applicable under consideration. Replacing the formal […]
What is the difference between Objective of audit and Purpose of audit
Although the terms objective and purpose are mostly used to mean the same and are used interchangeably but under International Auditing Standards (ISAs) the purpose of audit and objective of audit is NOT the same thing. Under ISAs the term purpose of audit simply means why audit is conducted. Whereas objective of audit means what […]
What is the difference between Due Care and Due Diligence in auditing?
In IESBA Code of Ethics for Professional accountants, one of the fundamental principles is the principle of Professional competence and due care. Practitioner (auditor) is required to conduct assurance engagement with due care which ultimately requires auditor to act diligently. Due care simply refers to the degree of care which is expected from a reasonable […]