Audit procedures
UNIVERSITY OF NAIROBI
Principles of auditing term paper
GROUP 3
NAME REG. NO
1. KINUTHIA ROSEMARY D33/2395/2011
2. OMONDI BRADLEY D33/2389/2011
3. KEMUNTO DOLLY D33/2375/2011
4. MENGICH NOAH D33/2460/2011
DECLARATION
We declare that this assignment is our original work and has not been submitted elsewhere for examination, award of a degree or publication. Where other people’s work, or our own work has been used, this has properly been acknowledged and referenced in accordance with the University of Nairobi’s requirements
KINUTHIA R.W. D33/2395/2011 …………………….
MICHIRA D. K. D33/2375/2011 …………………….
OMONDI B.O. D33/2389/2011 …………………….
MENGICH N.K. D33/2460/2011 …………………….
TABLE OF CONTENTS
CHAPTER 4; CLIENT ACCEPTANCE
4.1 INTRODUCTION
The client acceptance stage has two objectives;
a) Examining the proposed client to determine if there is any reason to reject the engagement (acceptance of the client). To do so, the auditor obtains a preliminary understanding of the client, in order to both evaluate the client’s background and the risks associated with accepting the engagement.
b) Convincing the client to hire the auditor (acceptance by the client). The auditor must thus understand his relationship to the client to enable him consider if the ethical and professional requirements (independence, competence, etc.) typical to the specific engagement can be met.
Client acceptance and continuance procedures are the foundation of the risk assessment process, primarily at the financial statement level. Management 's integrity is one of the elements of risk at the financial statement level. High risk at the financial statement level requires more evidence to mitigate the risk. Low risk requires less evidence.
As adapted from a lately published weekly review, “SQCS No. 8, effective January 1, 2012, requires that a CPA firm establish and document policies and procedures for the acceptance
Principles of auditing term paper
GROUP 3
NAME REG. NO
1. KINUTHIA ROSEMARY D33/2395/2011
2. OMONDI BRADLEY D33/2389/2011
3. KEMUNTO DOLLY D33/2375/2011
4. MENGICH NOAH D33/2460/2011
DECLARATION
We declare that this assignment is our original work and has not been submitted elsewhere for examination, award of a degree or publication. Where other people’s work, or our own work has been used, this has properly been acknowledged and referenced in accordance with the University of Nairobi’s requirements
KINUTHIA R.W. D33/2395/2011 …………………….
MICHIRA D. K. D33/2375/2011 …………………….
OMONDI B.O. D33/2389/2011 …………………….
MENGICH N.K. D33/2460/2011 …………………….
TABLE OF CONTENTS
CHAPTER 4; CLIENT ACCEPTANCE
4.1 INTRODUCTION
The client acceptance stage has two objectives;
a) Examining the proposed client to determine if there is any reason to reject the engagement (acceptance of the client). To do so, the auditor obtains a preliminary understanding of the client, in order to both evaluate the client’s background and the risks associated with accepting the engagement.
b) Convincing the client to hire the auditor (acceptance by the client). The auditor must thus understand his relationship to the client to enable him consider if the ethical and professional requirements (independence, competence, etc.) typical to the specific engagement can be met.
Client acceptance and continuance procedures are the foundation of the risk assessment process, primarily at the financial statement level. Management 's integrity is one of the elements of risk at the financial statement level. High risk at the financial statement level requires more evidence to mitigate the risk. Low risk requires less evidence.
As adapted from a lately published weekly review, “SQCS No. 8, effective January 1, 2012, requires that a CPA firm establish and document policies and procedures for the acceptance
References: 1. Course notes from the lecturer, Mr. Mwachiti 2. K. H. Spencer Pickett (2010). The Internal Auditing Handbook. (John Wiley & Sons Ltd) 3. International Standards on Audit, ISA 620. (15th December 2009). Using the work of an auditor’s expert. Page 632-652. 4. International Standards on Audit, ISA 210. (15th December 2009). Agreeing the terms of audit engagements. Page 9-21 5. Online ACCA F8: Auditing and Assurance course notes. Retrieved on 5th September, 2011 from (http://opentuition.com/acca/f8/f8-course-notes/) 6. Strathmore University CPA Study pack on Auditing 7. http://www.accountingweb.com/article/auditing-special-purpose-frameworks-client-acceptance-and-continuance-decision-making/223166 8. http://www.researchassociatesinc.com/documents/BestPracticesClient.aspx