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CS Professional · Compliance Management, Audit and Due Diligence · Audit Engagement

Before accepting the audit of Raman Steels Ltd., partner Ms. Iyer wants to know which matters SA 210 treats as preconditions that are within the control of the entity and on which the auditor and management must agree, as distinct from matters within the auditor's own control. Which statement is correct?

Independence and professional competence are within the auditor's control and are addressed by SA 220. SA 210 deals with the preconditions that lie within the entity's control and on which the auditor and management must agree before the engagement is accepted.

  1. AIndependence and professional competence are within the auditor's control and are dealt with under SA 220, whereas SA 210 deals with preconditions within the entity's controlCorrect
  2. BSA 210 deals with the auditor's independence and competence, while SA 220 deals with management's responsibilities
  3. CBoth independence and management's responsibilities are dealt with only in SA 300
  4. DPreconditions are entirely within the auditor's control and need no agreement with management

Explanation

SA 210 notes that the auditor's responsibilities on ethical requirements such as independence and competence, so far as within the auditor's control, are dealt with in SA 220. SA 210 addresses the preconditions within the entity's control that the auditor and management must agree upon. The other options reverse or blur this split.

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