Question

Task 4 Critically comment on Ms. Nancy’s acceptance of the bank audit and explain what are the necessary steps that should be taken before accepting an audit engagement.

Answer 1

Explanation:

Bank audit are mandatory in order to be conducted by bank to satisfy statue requirement.

The auditor must report that their books are presented as per regulations and are presenting true and fair view.

The auditor are given a specific time frame within which the bank audit is to be conducted by the auditor of the banks and all the branches and report to be submitted to the head office.

The auditor in Bank audit must ensure that their reports present information about advances, deposits, interest income and all interest expenses.

The auditor has to further check three elements in an Bank audit

• cash verification procedure
• tax related items
• verification of loan accounts
  

Accepting engagement letter

The steps that and auditor should take before accepting an audit engagement are as follows

• the auditor must understand about the size, nature of business, location and level of business of the client.
• The auditor should take an understanding about the relationship of client and previous auditor and also information about the payment of his fees.
• The audit staff requirement to conduct and the experience of selected engagement team whether they have proper knowledge, training and experience to conduct the related audit.
• Before accepting the audit engagement , discuss the areas for which the audit is to be conducted.