Before Appointment
• The auditor should assess whether it has the adequate resources to carry on the audit to completion. This is in terms of staff available and timing of the client.
• The issue of independence should then be looked into i.e. is the firm related in any way with the client.
• The auditor should communicate with the previous auditor of the client to get some background information about the potential client before he can accept nomination.
• The auditor should ensure his appointment follows the proper channels i.e. Companies Act Cap 486
Letter of Engagement
On accepting nomination the auditor should communicate this to his client via a letter of engagement, outlining the scope of his duties.
The Actual Audit
The auditor should then obtain a list of all the books kept by the client, including the signatures of the officers who were in charge of them, and their signatures.
The auditor should then schedule an appointment with the relevant officer in the company
e.g. the director, to discuss matters pertaining to the audit.
The auditor should then examine the accounting system and any weakness should be communicated immediately and corrective action taken.
Should there be a system of internal controls, the auditor should obtain a documentation of this and should set out to assess its strength or weakness.
The auditor should ask the client for a file of all vouchers in order of occurrence of transaction.
The auditor should obtain the Memorandum and Articles of Association, Partnership deeds etc. to assess whether the client‘s activities are in order as per the documents.
The auditor should prepare an audit programme so that he can start his audit work. Carry out verification of Balance Sheet items.
Review the audit work.
Prepare the audit report.
