explain me SA 210

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 prashant soni asked over 3 years ago

EXPLAIN THE SA 210: Agreeing the Terms of Audit Engagements in short

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ARJUN PRATAP SINGH commented over 1 year ago

Dear sir your heading is regardin SA 200 and question is regardin SA 210 here i am answering the question of SA 210

prashant soni commented over 1 year ago

sorry for wrong typing

4 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered about 3 years ago

> SA 210 – Agreeing Upon the Terms of Engagement **Scope of this SA** - This Standard on Auditing (SA) deals with the auditor’s responsibilities in agreeing the terms of the audit engagement with management and, where appropriate, those charged with governance. - This includes establishing that certain preconditions for an audit, responsibility for which rests with management and, where appropriate, those charged with governance, are present. Objective -The objective of the auditor is to accept or continue an audit engagement only when the basis upon which it is to be performed has been agreed, through: (a) Establishing whether the preconditions for an audit are present; and (b) Confirming that there is a common understanding between the auditor and management and, where appropriate, those charged with governance of the terms of the audit engagement. Requirement - Precondition for audit are present Whether financial reporting framework to be applied is acceptable Obtained an agreement that management acknowledges and understand its responsibilities --For preparation of financial statement --For Internal controls --For providing access to all information --For providing unrestricted access to persons within entity **Don’t accept engagement if** --Scope limitation --Preconditions for audit are not present --Financial reporting framework is unacceptable --If agreed terms has not been obtained. Agreement on Audit Engagement Terms The agreed terms of the audit engagement shall be recorded in an audit engagement letter or other suitable form of written agreement and shall include: (a) The objective and scope of the audit of the financial statements; (b) The responsibilities of the auditor; (c) The responsibilities of management; (d) Identification of the applicable financial reporting framework for the preparation of the financial statements; and (e) Reference to the expected form and content of any reports to be issued by the auditor and a statement that there may be circumstances in which a report may differ from its expected form and content. Recurring Audit -On recurring audits, the auditor shall assess whether circumstances require the terms of the audit engagement to be revised and whether there is a need to remind the entity of the existing terms of the audit engagement. Acceptance of a Change in the Terms of the Audit Engagement -The auditor shall not agree to a change in the terms of the audit engagement where there is no reasonable justification for doing so. -If, prior to completing the audit engagement, the auditor is requested to change the audit engagement to an engagement that conveys a lower level of assurance, the auditor shall determine whether there is reasonable justification for doing so. -If the terms of the audit engagement are changed, the auditor and management shall agree on and record the new terms of the engagement in an engagement letter or other suitable form of written agreement. - If the auditor is unable to agree to a change of the terms of the audit engagement and is not permitted by management to continue the original audit engagement, the auditor shall: (a) Withdraw from the audit engagement where possible under applicable law or regulation; and (b) Determine whether there is any obligation, either contractual or otherwise, to report the circumstances to other parties, such as those charged with governance, owners or regulators. Audit Engagement Letter Auditor should send preferably before commencement of audit, to help avoid any misunderstandings Should be recorded in suitable form. Should be acknowledged by client. Principal Contents (may vary for each client) --Scope of Audit --Objective --Responsibility of Auditor --Inherent limitations of audit --Management’s responsibilities --Unrestricted access to records --Expectation of receiving from management written representations. --Audit process subject to Peer review Fee computation basis and billing arrangements Deliverable list – Letters/Reports to be issued to client. Arrangements for planning of audit. Arrangement concerning involvement of other auditors/ experts/ predecessor auditor/internal auditor etc. Any restriction on auditor’s liability when such possibility exists.

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Data?1494421730 rohit awasthi answered over 3 years ago

Dear Friend > SA 210 – Agreeing the Terms of Audit Engagement Objective of the standard Auditor and client should agree on terms of engagement. Agreed terms would need to be recorded in an audit engagement letter or other suitable form of contract Auditor is to accept or continue audit engagement only when the basis upon which it is to be performed has agreed through --Establishing that preconditions for an audit are present --Confirmed the common understanding between Auditor and management Requirement - Precondition for audit are present Whether financial reporting framework to be applied is acceptable Obtained an agreement that management acknowledges and understand its responsibilities --For preparation of financial statement --For Internal controls --For providing access to all information --For providing unrestricted access to persons within entity Don’t accept engagement if --Scope limitation --Preconditions for audit are not present --Financial reporting framework is unacceptable --If agreed terms has not been obtained. Requirement – Agreement on Audit Engagement Terms Agree the terms of an engagement with management Should be recorded in suitable form --Objective and scope of audit --Responsibilities of auditor --Responsibilities of management --Expected form and content of an audit report to be issued --Applicability of law and regulation Audit Engagement Letter (AEL) Auditor should send preferably before commencement of audit, to help avoid any misunderstandings Should be recorded in suitable form. Should be acknowledged by client. Principal Contents (may vary for each client) --Scope of Audit --Objective --Responsibility of Auditor --Inherent limitations of audit --Management’s responsibilities --Unrestricted access to records --Expectation of receiving from management written representations. --Audit process subject to Peer review Fee computation basis and billing arrangements Deliverable list – Letters/Reports to be issued to client. Arrangements for planning of audit. Arrangement concerning involvement of other auditors/ experts/ predecessor auditor/internal auditor etc. Any restriction on auditor’s liability when such possibility exists. Recurring Audits Consider need for revision of the terms of engagement and need to remind the client of the existing terms of engagement. New engagement letter when Arrangements for planning of audit. --Change in senior management/BOD/ownership. --Significant change in nature or size of client’s business. --Misunderstanding by client of objective and scope of audit. --Legal requirements or pronouncements of ICAI, or changes in the existing ones. --Any revised or special terms of engagement Thanks

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Manoj answered over 3 years ago

Hello, SA 210 Agreeing the Terms of Engagement deals with the responsibility of the Auditor before starting the audit. It deals with the auditor approach. The Terms of Engagement is nothing but the Terms & Conditions of audit. It specify the Scope of Audit, Objective of Audit, Nature of Audit, Management Responsibility, Activities to be undertaken related to the Audit. Further it also specify that Should Auditor issue new New Terms of Engagement on Recurring Audit and What are the Condition which affect the Type of Opinion on the Management decision to accept the Terms of Engagement.

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Open uri20170510 32134 s5bvk0?1494421637 ARJUN PRATAP SINGH answered over 3 years ago

Dear Soni Ji, SA 210 is for matter regarding Agreeing the Terms of Audit Engagement its full name as given by issuing body i.e. ICAI is **SA 210 Agreeing the Terms of Audit Engagements** and matter of this SA is as given follow..... Auditor and client should agree on terms of engagement. Agreed terms would need to be recorded in an audit engagement letter or other suitable form of contract. and The form and content of audit engagement letter may vary for each client, but would generally include (a) objective and scope of the audit of financial statements; (b) responsibilities of the auditor; (c) responsibilities of management; (d) Identification of applicable financial reporting framework for the preparation of financial statements; (e) Reference to the expected form and content of any reports to be issued by the auditor and a statement that there may be circumstances in which a report may differ from its expected form and content. And Other matters as per the circumstances should also be included In case of recurring audits auditor should consider whether circumstances require the terms of engagement to be revised Where the terms of engagement are changed, auditor and client should agree on the new terms. If auditor is unable to agree to a change of engagement and is not permitted to continue the original engagement, the auditor should consider withdrawing from the engagement and determine whether there is any obligation, either contractual or otherwise, to report the circumstances to other parties, such as those charged with governance, owners or regulators. if any doubt please let me know Regards, Arjun P.Singh

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