ACCA · Question 05 · Audit Framework and Regulation
SECTION A - CASE 1: NEUROCLOUD ANALYTICS CO
NeuroCloud Analytics Co is a fast-growing tech startup providing AI-driven data analytics to the healthcare sector. You are an audit manager at Turing & Co, planning the audit for the year ended 31 December 20X5. NeuroCloud is not a public interest entity (PIE).
During the planning phase, you note the following:
Question:
Before accepting the audit engagement for NeuroCloud, Turing & Co must establish whether the preconditions for an audit are present. Which TWO of the following are preconditions for an audit according to ISA 210 Agreeing the Terms of Audit Engagements?
Answer options:
Determining whether the financial reporting framework to be applied in the preparation of the financial statements is acceptable.
Ensuring that the audit fee is agreed upon and paid in advance of the audit work commencing.
Obtaining the agreement of management that it acknowledges and understands its responsibility for internal control.
Confirming that the client has an established internal audit function.
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