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Types of audit engagements - Coggle Diagram
Types of audit engagements
Engagement
Assurance
Audit
Reasonable assurance
Positive assurance
4 phases
Review
Moderate assurance
Negativeassurance
Non-assurance
Agreed upon procedures
No assurance
Factual findings
Compilation engagements
No assurance
Information of information compiled
ISA
Objectives, requirements, application and other explanatory material
Overall objectives
Assurance services
Audit
reasonable
assurance
free from material misstatement
express an opinion
applicable financial reporting framework
fraud or error
limitations
Nature of financial accounting
Nature of audit procedures
Evidence usually persuasive rather than conclusive
The use of testing
Inherent limitations of accounting and internal control system
Timeliness of financial reporting and balance between benefit and cost
Other maters
4 Phases
Pre-engagement
continue or accept an engagement when the preconditions are met:
financial reporting framework to be audited
obtains an agreement
terms of the audit are formalized in an engagement letter.
The reasons
Planning
well designed to prevent an audit from being conducted ineffectively
identify risks
the ‘tests’
overall audit strategy and an audit plan
professional skepticism
Advantages
Steps to follow
Audit evidence
Evaluate, conclude and report
Financial manager
• Provide the necessary documentation to the auditor;
• Resolve any queries that arise;
• Provide explanations;
• Coordinate the process/team/timelines;
• Expectation management; and
• Learn from the value adding elements that the auditors provide
Review
Moderate
assurance
To report
Non assurance
the auditor in the audit report gives no opinion or comment.
Agreed upon procedures; andCompilation engagements
reasonable assurance