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CMA Intermediate · Corporate Accounting and Auditing · Audit Engagement, Audit Program, Audit Documentation and Audit Evidence

Before the audit program for Ganga Foods Ltd is finalised, the auditor seeks to establish the preconditions for an audit under SA 210. Which of the following is a management responsibility the auditor must obtain agreement on?

Management must agree to provide the auditor unrestricted access to persons within the entity from whom the auditor determines it necessary to obtain audit evidence. Designing procedures, deciding sample sizes and setting materiality remain the auditor's own responsibilities, not management's.

  1. ADesigning the audit procedures to be performed on each balance
  2. BDeciding the sample size for testing of transactions
  3. CProviding the auditor unrestricted access to persons within the entity from whom audit evidence is necessaryCorrect
  4. DDetermining the auditor's materiality level

Explanation

Under SA 210, management must acknowledge responsibility for preparing the financial statements, for necessary internal control, and for providing access to all relevant information, additional information requested, and unrestricted access to persons within the entity from whom the auditor needs evidence. Designing procedures, sample sizes and materiality are auditor matters.

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