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

CA Desai is finalising the engagement letter for Kaveri Agro Ltd, an initial audit where another firm audited earlier. Which of the following is a point that SA 210 says could be made in the letter when relevant?

Arrangements to be made with the predecessor auditor in an initial audit are a point SA 210 says could be included in the engagement letter when relevant. The other statements conflict with audit standards or with the required wording on report form.

  1. AArrangements to be made with the predecessor auditor in the case of an initial auditCorrect
  2. BA guarantee that no material misstatement exists in the financial statements
  3. CA waiver of the auditor's obligation to follow SAs
  4. DA statement that the report will not differ from its expected form in any circumstances

Explanation

Arrangements with the predecessor auditor in an initial audit are listed among the points that could be included when relevant. The letter cannot waive SAs, and the required terms say there may be circumstances where a report differs from its expected form, so the last option is wrong.

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