Answer Happy

Question 2 The purpose and objective of an auditor is to formopinions on whether the operations of an entity are effective andefficient and if financial statements are reliable and do notcontain any material misstatements. Once an audit is accepted by anauditor they will need to gather evidence that is sufficient andreliable which will support any opinions that are made by theauditor. The audit process is a logical and systematic processwhich is planned and implemented in accordance to the auditstandards. Prior to the audit conducting an audit there are stageswhich need to be followed. What are these stages? (4 marks)2.1There are two requirements which should be fulfilled prior to theacceptance of an engagement which is to establish if thepre-conditions of the audit exist and ensuring that there is amutual understanding which is present between management, theauditor and individuals who are in charge of governance of theaudit engagement. What are the two pre-conditions of an audit? (4marks)2.2 The audit plan consists of a greater amount of details ascompared to the audit strategy. Identify 2 items which should bedocumented in the audit plan. (2 marks)