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Pre-engagement activities - Coggle Diagram
Pre-engagement activities
Independency of the Auditor
F. Principle affected
Significance of threat
Identify the threat
Safeguards
Consider Part 4A of SAICA CPC
Integrity of client
Positives
Negatives
Risk of legal liability for auditors
Whenever there is a law mentioned, there is risk of non-compliance.
Financial responsibility of the client
Litigation issues
Consider going concern, may be an indicator that client might not be able to pay audit fees
Changes during the year
Communication with the Predecessor auditor
Did they resign or were they removed?
P.Auditor refusing to communicate with us, makes him unreliable. and therefore cannot rely on opening balances
Refusal to communicate with us =limitation of scope.
Other consideration
Requirements of the audit (do they require one firm to audit the whole grp?)
Not accepting the audit, will not enable you to gather SA audit evidence for the grp.
Considering to accept the audit of the sub of (P)