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I am trying to find sources to answer the following questions in F8 Syllabus. I have not be able to get the answers in my LSBF ACCA Text book. Find below the questions:

  1. Discuss the requirements of professional ethics and ISAs in relation to the acceptance /continuance of audit engagements

  2. Explain the preconditions for an audit

Your contributions is highly appreciated.

September 19th 2017 AN ACCA USER 120 Points

2 Replies

+1 Vote

Preconditions for an audit

Auditors should only accept a new audit engagement, or continue an existing audit engagement if the 'preconditions for an audit' required by ISA 210 Agreeing the terms of audit engagements are present.

ISA 210 requires the auditor to:

Determine whether the financial reporting framework to be applied in the preparation of the financial statements is appropriate; and
Obtain the agreement of management that it acknowledges and understands its responsibilities.
If the preconditions for an audit are not present, the auditor should discuss the matter with management, and should not accept the engagement unless required to do so by law or regulation.


If offered an audit role, the auditor should:

ask the client for permission to contact the outgoing auditor (reject role if client refuses)
contact the outgoing auditor, asking for any reasons why they should not accept appointment. If a reply is not received, the prospective auditor should try and contact the outgoing auditor by other means e.g. by telephone. If a reply is still not received the prospective auditor may still choose to accept but must proceed with care.
ensure that the legal requirements in relation to the removal of the previous auditors and the appointment of the firm have been met
carry out checks to ensure the firm can be independent, is competent to do this audit and has the necessary resources
assess whether this work is suitably low risk
assess the integrity of the company's directors
as a commercial organisation, the firm should also ensure that this is a desirable client (e.g. right industry, suitable profit margin etc)
not accept the appointment, where it is known that a limitation will be placed on the scope of the audit.


September 19th 2017 AN ACCA USER 790 Points
+1 Vote

In continuation of previous reply, you then needs to bring in professional ethic requirements aspects for, on ethical condition that must be considered before an auditor can accept new audit or, in fact continue in their professional roles, this includes, Integrity, objectivity, professional behavior, competence, and confidentiality, if any of these stands breached by accepting or continued acting in professional capacity, then the author should consider this along provisions of ISA 210. Is being able to harmonize these provisions into factors to consider before accepting any role. I hope that helps.

September 21st 2017 AN ACCA USER 250 Points