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Flashcards in Responsibilities Deck (19)
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1

Name the elements of an assurance engagement. (CREST)

Criteria
Report
Evidence
Subject matter
Three party relationship

2

Criteria

~ Audits required by law to use ISAs, IFRSs, Co act '06
~ non-audit use ISAEs and ISREs (optional)

3

Report

Audit opinion vs Assurance conclusion

4

Audit opinion

~ reasonable assurance
~ expressed positively
~ in auditors op. FS are 'true and fair'

5

Assurance conclusion

~ limited assurance
~ expressed negatively
~ 'nothing has come to our attention'

6

Subject matter

~ non-audit documents will be bespoke
~ may need to add caveats for forecasts

7

Three party relationship

~ FS primarily used by SH and are publicly available
~ other report may have different users and could be publish/confidential

8

Benefits of assurance

~ increased credibility of subject matter
~ may find deficiencies in subject matter
~ will make later assurance engagements easier
~ will help business (e.g. apply for loan, 2nd set of professional eyes)

9

Exempt from audit if...

~ < 50 e'ee
~ revenue < £10.2m
~ gross assets

10

Directors responsibility: General

~ maintain accounting records
~ prep FS
~ safeguard assets

11

Directors responsibility: Audit/IC

~ design IC which will prevent, detect and correct errors and omissions

12

Directors responsibility: Fraud

prevent, detect and correct any instance of fraud

13

Directors responsibility: Laws and regs

Identify and comply with all relevant laws and regs

14

Directors responsibility: going concern

~ do going concern assessment
~ prep forecasts to support going concern assumption

15

Directors responsibility: ML/Bribery

prevent through internal controls

16

Auditors responsibility: Audit/IC

~ express op. on FS
~ detect material misstatements
~ test internal controls addressing audit risks
~communicate IC weaknesses to TCWG

17

Auditors responsibility: Fraud

~detect material fraud in FS
~ obtain written rep from directors acknowledging their respon.
~communicate fraud found w/ mgt, TCWG and regs.

18

Auditors responsibility: ML

~ appoint MLRO
~ MLRO report suspicions to NCA
~ train staff to spot
~ perform client identification procedures
~ keep records
~ don't tip off

19

Auditors responsibility: Bribery

~ consider risks on non-compliance
~ report suspicions to NCA