Engagement letter

Internal audit report

Client’s financial

statement

Audit strategy

memorandum

It discourages systematic auditing.

It increases the possibility of overlooking

important records.

It eliminates the need for supervision.

It provides clear instructions for the work to be

done.

Client risk assessments and resource allocation.

Nature, timing, and extent of audit procedures.

The final audit report framework.

A high-level overview of objectives and scope.

Client's market share

Integrity of

management and governance structures

Client's advertising

strategy

Auditor's financial

interest in the client

Audit is narrow in scope, while investigation is

broad

Audit provides reasonable assurance, while

investigation is focused on specific purposes

Audit and investigation have the same objectives

Audit has legal powers of search, while

investigation does not

The client’s

management team

External regulatory

authorities

Only the engagement

partner

The engagement

partner and key team members

A set

of guidelines issued by regulatory authorities.

A

process designed to prevent financial fraud entirely.

A

mechanism implemented by auditors to ensure compliance.

A

process designed to provide reasonable assurance regarding the achievement of

objectives.

Audit

strategy sets the direction, audit plan details the approach, and audit

programme operationalizes tasks.

Audit

plan precedes the audit strategy, and the audit programme replaces the

strategy.

Audit programme defines the

scope, while the strategy and plan focus on testing.

Audit

strategy is a checklist, audit plan is high-level, and audit programme is about

timing.

Fraud often involves sophisticated schemes and

deliberate concealment

Auditors are not required to assess internal

controls

Auditors focus only on low-risk areas

Auditors do not test all transactions

Professional skepticism

Optimistic

Trusting of management’s representations

Passive