Identify and explain TWO factors which would indicate that an engagement letter for an existing audit client should be revised

Identify and explain TWO factors which would indicate that an engagement letter for an existing audit client should be revised

2 ISA 210 Agreeing the Terms of Audit Engagements requires auditors to agree the terms of an engagement with those
charged with governance and formalise these in an engagement letter.
Required:
(a) Identify and explain TWO factors which would indicate that an engagement letter for an existing audit client
should be revised. (2 marks)
(b) List SIX matters which should be included within an audit engagement letter. (3 marks)
(c) Your audit firm has just won a new audit client, Milky Way Technologies Co (Milky Way), and you have been
asked by the audit engagement partner to gain an understanding about the new client as part of the planning
process.
Required:
Identify FIVE sources of information relevant to gaining an understanding of Milky Way Technologies Co and
describe how this information will be used by the auditor.


 

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