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

Iyer & Co. has audited Nila Exports Ltd. for several years. The engagement partner says that client continuance and ethical checks, including independence, were done at the start of the first year and need no further consideration. Under SA 300, what is the correct view?

Client continuance and ethical requirements, including independence, are considered throughout the audit engagement as conditions and circumstances change. They are not a one-time first-year check, though for continuing engagements the initial procedures often occur shortly after the previous audit is completed.

  1. AContinuance and ethical considerations occur throughout the engagement as conditions and circumstances changeCorrect
  2. BThey are required only in the first year of the relationship
  3. CThey are required only at the time of signing the audit report
  4. DThey are required only if the client changes its registered office

Explanation

SA 300 states that consideration of client continuance and ethical requirements, including independence, occurs throughout the audit engagement as changes in conditions and circumstances occur. For continuing engagements, initial procedures often occur shortly after or in connection with completing the previous audit.

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