This section states the requirements and provides application guidance on the auditor’s responsibilities when agreeing upon terms of engagement with management and those charged with governance. It also establishes the important preconditions for an audit, for which management is responsible. AU-C 220, Quality Control for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards, addresses those aspects of engagement acceptance that the auditor can control and the auditor’s responsibilities regarding ethical requirements concerning acceptance of an engagement. (AU-C 210.01 and .A1)
DEFINITIONS OF TERMS
Source: AU-C 210.04. For definitions related to this standard, see Appendix A, “Definitions of Terms”: Preconditions for an audit, Recurring Audit.
OBJECTIVES OF AU-C SECTION 210
AU-C Section 210.03 states that:
… the objective of the auditor is to accept an audit engagement for a new or existing audit client only when the basis upon which it is to be performed has been agreed upon through
- establishing whether the preconditions for an audit are present and
- confirming that a common understanding of the terms of the audit engagement exists between the auditor and management and, when appropriate, those charged with governance.