Afzal is the in-charge auditor for the upcoming annual audit of Fast Tech Ltd., a new audit client. Afral will supervise two assistants on the engagement and will visit the entity before the fieldwork begins. Afzal has completed all preliminary verbal discussions and inquiries among the Staff of the Firm, The client, the predecessor auditor, and all other necessary parties have been completed. Afral is now preparing an engagement letter and drafting the initial audit plan.

a. Given that situation, Who is the most important user of an audited financial statement of Fast Tech Ltd.: company management, the company's shareholders, or the company's creditors? Briefly explain your rationale and indicate how auditors should resolve potential conflicts if any in the needs of the three parties.

b. What skills and knowledge were required to do a quality audit of Fast Tech Lid's financial statements? How could the auditor who actually performed the audit work on the Fast Tech Lid engagement ensure quality auditing in this regard? [Marks-10). e...While the auditor is selecting a client should the auditor only need to assess management integrity? Or auditor also has to assess the integrity of the audit team? Why management integrity is considered the most important factor affecting the client acceptance or continuation decision?

d. Discuss the essential activities involved in the initial planning of an audit? How auditor can understand the business and industry of the Fast Tech Ltd.

c. After finding all relevant matters convincing Auditor is now preparing engagement letter, List the items that should be included in the typical engagement letter in these circumstances?

Answer rating: 100% (QA)

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