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Audit related services, Quartely report
removing info asymmetry
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Audit related services
- :red_cross:same as audit service
- use same method (AEIOU) as auditing FS
- client has right to select certain procedures to be implemented
-
Review engagement
Attestation engagement
- certified particular assertion had been fulfilled by client
- express conclusion abt assertion (eg. True & Fair)
- provide conclusion abt subj matter, similar to assertion made (eg. FS presents fairly in all material respect the ......)
Review of interim financial info (Quartely result)
- listed co required to publish
- review by external auditor, provide negative assurance
- attached with interim report b4 released
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- planning
- obtain knowledge of the biz
- same materiality requirement
- using work of others
- evidence
- doc all important matters
- apply judgement in determining nature, timing, extent
- enquire abt subsequent event
- extend procedures if material misstatements suspected
Scope
- planning
- interview
- analytical procedure
- enquiries
Due diligence engagement
Financial due diligence
Main tasks:
- review latest set of FS prepared by seller on agreed cut-off date (need not y/e date), especially SOFP
- advise the client on any risks tht may exist in targeted co tht they ought to know
- focus on possible deal breaker
-
Quartely report
- removing info asymmetry
- refer to the disparity in accessing info btwn insiders (directors) & outsider (shareholders)
Audit of historical FS
- required by law
- reasonable lvl of assurance
- scope of work stipulated by statue & auditing stds
Audit related services
- required by client on ad-hoc basis
- review engagement: limited assurance
- due diligence engagement: may not be assurance engagement
- assurance service: PA express opinion on FS prepared by seller & prospective financial info
- non-assurance service: PA highlight adj in seller's FS, :red_cross:giving opinion on subj matter
- scope of work determined by client & agreed with auditor, depend on type of engagement & lvl of assurance
:red_flag:the obj of buyer may not always to acq the co / the whole biz, may eyeing on certain assets (eg. land / bldg)
- the focus of engagement will be on determining the existence, valuation & rights of the assets, :red_cross:consider deal breaker
- b4 accepting the appointment, find out client's obj of buying the co (eg. biz, assets, own use)