Engagement Acceptance – NBC Institute

AAA – Nov 2021 – L3 – Q2 – Advanced Audit Planning and Strategy

Evaluate internal and external business risks and outline pre-engagement activities for Sunsit Manufacturers Ltd.

Question

The auditors of Sunsit Manufacturers Limited had disagreements with the company on various issues. This came to a climax with the withholding of a part of the payment of the last audit fees. The auditors had also been disenchanted with the undue pressures of management and have decided that, as a result of this and the withheld fees, they would disengage from the client.

The company’s chairman, in consideration of past issues, has considered the size of the audit firm as being partly responsible for its inability to manage adequately the pressures from the company’s accounting and management team. He has subsequently approached your firm for a change, and the partners have accepted the engagement despite the predecessor auditor’s declaration of the forfeiture of the firm’s outstanding fees and no further involvement with the client and issues relating to the company.

Required:

a. Following the background to the client and the engagement, evaluate the internal and external business risks that need to be considered with respect to the client. (10 Marks)

b. Discuss the pre-engagement activities to be carried on the client. (10 Marks)

Answer

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Tags: Auditor Independence, Business risk, Engagement Acceptance, Pre-engagement activities, Risk Assessment
Level: Level 3

Topic: Advanced Audit Planning and Strategy

AA – Nov 2016 – L2 – Q2a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

This question addresses the ethical issues auditors face when accepting clients and engagements, focusing on independence and professional conduct.

Question

Audit practice around the world is generally a business, and its objective is to make profit. However, this does not mean that the practice should automatically accept every audit engagement that is offered to it to maximise profit. Circumstances may arise where it is appropriate to decline the offer of an audit engagement for either commercial or ethical reasons.

Required:
a. Discuss the ethical issues to be considered by an independent auditor in the following matters:
i. Client Acceptance
ii. Engagement Acceptance
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditor's Liability, Client Acceptance, Engagement Acceptance, Ethical Standards, Independence, Professional Ethics
Level: Level 2

Topic: Professional Ethics and Code of Conduct for Auditors
Series: NOV 2016

AA – May 2020 – L2 – Q5a – Planning and Approach for Audit and Assurance Engagements

Discuss three factors the auditor must consider before accepting or continuing an audit engagement.

Question

ISA 220 – Quality Control for an Audit of Financial Statements deals with the specific responsibilities of the auditor regarding quality control procedures for an audit of financial statements. It also addresses, where applicable, the responsibilities of the engagement quality control reviewer. According to ISA 220, the auditor should consider certain factors before accepting a new engagement or continuing an existing engagement.

Required:
Discuss THREE (3) of such factors. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Engagement, Audit Standards, Engagement Acceptance, ISA 220, Quality control
Level: Level 2

Topic: Planning and Approach for Audit and Assurance Engagements
Series: MAY 2020

AAA – May 2017 – L3 – Q4a – Assurance services | Professional responsibility and liability

Discuss the considerations before accepting an engagement to certify benchmark petroleum revenue and the issues related to relying on an independent expert’s certification.

Question

Your firm has been contracted by the Office of the Auditor General (AG) of Ghana to provide the Ministry of Finance (MoF) with the certification of the Projection of Benchmark Petroleum Revenue for 2016.

The Petroleum Revenue Management Act (PRMA), 2011 (Act 815) became law in Ghana on 11 April 2011, and Section 17 of the PRMA requires the Minister responsible for Finance to make a projection of the amount of petroleum revenue that would accrue to the Government of Ghana in the coming year, not later than 1 September of each year.

The first schedule of the Act mandates an independent expert to certify the projection of the Benchmark Petroleum Revenue by the Minister before it would be used in the National Budget for the coming year.

The two major issues in the projection are the quantity of Oil and Gas expected and the world market price at which the oil and gas will be valued.

As part of the documents to be used in performing this assignment, MoF has given you:

Projection of the Benchmark Petroleum Revenue from oil and gas for 2016, and
Certification of the Estimate of the Oil and Gas production for 2016 from the existing and expected oil and gas producing fields in Ghana.

The first schedule of the Act prescribes a formula for the calculation of the Average Unit Price for Crude Oil and Natural Gas on the International Market to be used for the year. The certification in the Estimate of the Oil and Gas production was issued by an independent expert in the Oil and Gas industry.

Required:

i) State FOUR issues your firm will consider in order to decide whether or not to accept this engagement from the Office of the Auditor General. (4 marks)

ii) If your firm decides to accept the engagement, state FOUR issues your firm will consider in order to place reliance on the certification issued by the independent expert in the Oil and Gas industry in performing the engagement. (4 marks)

iii) State TWO audit procedures your firm would perform to determine that the Average Unit Price for Crude Oil and Natural Gas on the International Market for 2016 used by MoF in the Projection of the Benchmark Petroleum Revenue for 2016 is fairly stated. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Engagement Acceptance, Independent Expert, Petroleum Revenue Management
Level: Level 3

Topic: Assurance services, Professional responsibility and liability
Series: MAY 2017

AAA – May 2019 – L3 – Q2b Practice Management, Rules of Professional Conduct

Recommend safeguards necessary to eliminate or reduce threats associated with accepting new engagements.

Question

A Chartered Accountant in practice should agree to provide only those services that they are competent to perform. Before accepting a specific client engagement, they should consider whether acceptance would create any threats to compliance with the fundamental principles. A Chartered Accountant in practice should evaluate the significance of identified threats associated with an engagement; if they are other than clearly insignificant, safeguards should be applied as necessary to eliminate them or reduce them to an acceptable level.

Required:

Recommend FIVE (5) safeguards necessary to eliminate or reduce threats associated with accepting new engagements.

(5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Engagement Acceptance, Ethical considerations, Professional competence, Safeguards
Level: Level 3

Topic: Practice management, Rules of professional conduct

AAA – Nov 2021 – L3 – Q2 – Advanced Audit Planning and Strategy

Evaluate internal and external business risks and outline pre-engagement activities for Sunsit Manufacturers Ltd.

Question

Required:

a. Following the background to the client and the engagement, evaluate the internal and external business risks that need to be considered with respect to the client. (10 Marks)

b. Discuss the pre-engagement activities to be carried on the client. (10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditor Independence, Business risk, Engagement Acceptance, Pre-engagement activities, Risk Assessment
Level: Level 3

Topic: Advanced Audit Planning and Strategy

AA – Nov 2016 – L2 – Q2a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

This question addresses the ethical issues auditors face when accepting clients and engagements, focusing on independence and professional conduct.

Question

Required:
a. Discuss the ethical issues to be considered by an independent auditor in the following matters:
i. Client Acceptance
ii. Engagement Acceptance
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditor's Liability, Client Acceptance, Engagement Acceptance, Ethical Standards, Independence, Professional Ethics
Level: Level 2

Topic: Professional Ethics and Code of Conduct for Auditors
Series: NOV 2016

AA – May 2020 – L2 – Q5a – Planning and Approach for Audit and Assurance Engagements

Discuss three factors the auditor must consider before accepting or continuing an audit engagement.

Question

Required:
Discuss THREE (3) of such factors. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Engagement, Audit Standards, Engagement Acceptance, ISA 220, Quality control
Level: Level 2

Topic: Planning and Approach for Audit and Assurance Engagements
Series: MAY 2020

AAA – May 2017 – L3 – Q4a – Assurance services | Professional responsibility and liability

Discuss the considerations before accepting an engagement to certify benchmark petroleum revenue and the issues related to relying on an independent expert’s certification.

Question

The two major issues in the projection are the quantity of Oil and Gas expected and the world market price at which the oil and gas will be valued.

As part of the documents to be used in performing this assignment, MoF has given you:

Projection of the Benchmark Petroleum Revenue from oil and gas for 2016, and
Certification of the Estimate of the Oil and Gas production for 2016 from the existing and expected oil and gas producing fields in Ghana.

Required:

i) State FOUR issues your firm will consider in order to decide whether or not to accept this engagement from the Office of the Auditor General. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Engagement Acceptance, Independent Expert, Petroleum Revenue Management
Level: Level 3

Topic: Assurance services, Professional responsibility and liability
Series: MAY 2017

AAA – May 2019 – L3 – Q2b Practice Management, Rules of Professional Conduct

Recommend safeguards necessary to eliminate or reduce threats associated with accepting new engagements.

Question

Required:

Recommend FIVE (5) safeguards necessary to eliminate or reduce threats associated with accepting new engagements.

(5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Engagement Acceptance, Ethical considerations, Professional competence, Safeguards
Level: Level 3

Topic: Practice management, Rules of professional conduct

Question Tag: Engagement Acceptance

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AAA – Nov 2021 – L3 – Q2 – Advanced Audit Planning and Strategy

Evaluate internal and external business risks and outline pre-engagement activities for Sunsit Manufacturers Ltd.

AA – Nov 2016 – L2 – Q2a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

This question addresses the ethical issues auditors face when accepting clients and engagements, focusing on independence and professional conduct.

AA – May 2020 – L2 – Q5a – Planning and Approach for Audit and Assurance Engagements

Discuss three factors the auditor must consider before accepting or continuing an audit engagement.

AAA – May 2017 – L3 – Q4a – Assurance services | Professional responsibility and liability

Discuss the considerations before accepting an engagement to certify benchmark petroleum revenue and the issues related to relying on an independent expert’s certification.

AAA – May 2019 – L3 – Q2b Practice Management, Rules of Professional Conduct

Recommend safeguards necessary to eliminate or reduce threats associated with accepting new engagements.

AAA – Nov 2021 – L3 – Q2 – Advanced Audit Planning and Strategy

Evaluate internal and external business risks and outline pre-engagement activities for Sunsit Manufacturers Ltd.

AA – Nov 2016 – L2 – Q2a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

This question addresses the ethical issues auditors face when accepting clients and engagements, focusing on independence and professional conduct.

AA – May 2020 – L2 – Q5a – Planning and Approach for Audit and Assurance Engagements

Discuss three factors the auditor must consider before accepting or continuing an audit engagement.

AAA – May 2017 – L3 – Q4a – Assurance services | Professional responsibility and liability

Discuss the considerations before accepting an engagement to certify benchmark petroleum revenue and the issues related to relying on an independent expert’s certification.

AAA – May 2019 – L3 – Q2b Practice Management, Rules of Professional Conduct

Recommend safeguards necessary to eliminate or reduce threats associated with accepting new engagements.

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AAA – Nov 2021 – L3 – Q2 – Advanced Audit Planning and Strategy

Evaluate internal and external business risks and outline pre-engagement activities for Sunsit Manufacturers Ltd.

You're reporting an error for "AAA – Nov 2021 – L3 – Q2 – Advanced Audit Planning and Strategy"

AA – Nov 2016 – L2 – Q2a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

This question addresses the ethical issues auditors face when accepting clients and engagements, focusing on independence and professional conduct.

You're reporting an error for "AA – Nov 2016 – L2 – Q2a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)"

AA – May 2020 – L2 – Q5a – Planning and Approach for Audit and Assurance Engagements

Discuss three factors the auditor must consider before accepting or continuing an audit engagement.

You're reporting an error for "AA – May 2020 – L2 – Q5a – Planning and Approach for Audit and Assurance Engagements"

AAA – May 2017 – L3 – Q4a – Assurance services | Professional responsibility and liability

Discuss the considerations before accepting an engagement to certify benchmark petroleum revenue and the issues related to relying on an independent expert’s certification.

You're reporting an error for "AAA – May 2017 – L3 – Q4a – Assurance services | Professional responsibility and liability"

AAA – May 2019 – L3 – Q2b Practice Management, Rules of Professional Conduct

Recommend safeguards necessary to eliminate or reduce threats associated with accepting new engagements.

You're reporting an error for "AAA – May 2019 – L3 – Q2b Practice Management, Rules of Professional Conduct"

AAA – Nov 2021 – L3 – Q2 – Advanced Audit Planning and Strategy

Evaluate internal and external business risks and outline pre-engagement activities for Sunsit Manufacturers Ltd.

You're reporting an error for "AAA – Nov 2021 – L3 – Q2 – Advanced Audit Planning and Strategy"

AA – Nov 2016 – L2 – Q2a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

This question addresses the ethical issues auditors face when accepting clients and engagements, focusing on independence and professional conduct.

You're reporting an error for "AA – Nov 2016 – L2 – Q2a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)"

AA – May 2020 – L2 – Q5a – Planning and Approach for Audit and Assurance Engagements

Discuss three factors the auditor must consider before accepting or continuing an audit engagement.

You're reporting an error for "AA – May 2020 – L2 – Q5a – Planning and Approach for Audit and Assurance Engagements"

AAA – May 2017 – L3 – Q4a – Assurance services | Professional responsibility and liability

Discuss the considerations before accepting an engagement to certify benchmark petroleum revenue and the issues related to relying on an independent expert’s certification.

You're reporting an error for "AAA – May 2017 – L3 – Q4a – Assurance services | Professional responsibility and liability"

AAA – May 2019 – L3 – Q2b Practice Management, Rules of Professional Conduct

Recommend safeguards necessary to eliminate or reduce threats associated with accepting new engagements.

You're reporting an error for "AAA – May 2019 – L3 – Q2b Practice Management, Rules of Professional Conduct"

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