Checklist for accepting a new audit engagement

Here is a checklist for accepting a new audit engagement:

Pre-Acceptance

  1. Review engagement letter: Carefully review the engagement letter to ensure you understand the scope, objectives, and terms of the engagement.
  2. Verify client information: Confirm the client's name, address, and contact information.
  3. Check for conflicts of interest: Identify any potential conflicts of interest and discuss with the client or your firm's leadership.
  4. Review client's financial statements: Review the client's previous financial statements to understand their financial position and any potential issues.

Acceptance Criteria

  1. Scope and objectives: Ensure you understand the scope and objectives of the audit engagement, including the types of procedures to be performed and the expected outcomes.
  2. Client's financial statements: Verify that the client's financial statements are complete, accurate, and consistent with the engagement letter.
  3. Audit procedures: Review the audit procedures to be performed, including the types of tests, sampling, and other procedures to be used.
  4. Audit team: Ensure that you have a suitable audit team with the necessary skills, experience, and qualifications to perform the audit.
  5. Audit planning: Review the audit plan to ensure it is comprehensive, realistic, and aligned with the engagement letter.
  6. Client's internal controls: Understand the client's internal controls and assess their effectiveness in preventing material misstatements.
  7. Risk assessment: Perform a risk assessment to identify potential risks and develop a plan to address them.
  8. Audit fees: Review the audit fees and ensure they are reasonable and in line with industry standards.
  9. Client's expectations: Discuss the client's expectations and ensure you understand their needs and concerns.
  10. Firm's policies and procedures: Ensure that your firm's policies and procedures are followed, including those related to audit quality, independence, and professional skepticism.

Acceptance

  1. Confirm acceptance: Confirm your acceptance of the audit engagement in writing, including any conditions or limitations.
  2. Notify the client: Notify the client of your acceptance and provide a copy of the engagement letter.
  3. Assign audit team: Assign the audit team and ensure they understand their roles and responsibilities.
  4. Develop audit plan: Develop a detailed audit plan, including the procedures to be performed, the timing, and the resources required.
  5. Communicate with the client: Communicate with the client throughout the audit engagement to ensure their needs are met and any issues are addressed.

By following this checklist, you can ensure that you have a thorough understanding of the audit engagement and are prepared to perform a high-quality audit.