How to use document 13.20 Engagement evaluation and planning
The objectives of this document are to:
Ensure that the audit firm accepts clients that fit the firm's risk profile and that the terms of the engagement have been agreed upon between the firm and the client.
Assist you in gaining a high-level understanding of the attorneys trust account and its environment.
Assist you in determining whether you want to assess materiality as well as assist you in determining the materiality figures which will be applied at the planning stage and in performing the assurance engagement on the attorneys trust account.
This document is divided into different tabs to assist you in planning the engagement:
- Engagement evaluation
- Gathering information
- Client information
Engagement evaluation & Gathering information
|Question||You will be guided to consider the terms of the engagement, consider compliance with ethical requirements as well as gather information about the attorneys trust account. ||In assessing all the questions you will be able to conclude as to whether or not the firm should accept or retain the client and gather information about the attorneys trust account that can be used to identify risks and/or focus work.|
|Yes/No||Answer the question by making a selection with the "Yes / No" drop-down box.||By answering the questions your engagement will be tailored and further procedures in the engagement file will be shown/hidden, particularly in work programs.|
|Description||Insert a short description, if necessary, to substantiate the answer given.||By describing your thought process in arriving at your answer you are able to substantiate your answer to reviewers and future enquiries.|
|Risk||Raise a risk, if necessary, relating to the question here.||When raising a risk you are prompted to perform work on the risk in other documents.|
|Ref.||Insert a reference, if necessary, to supporting documentation. You can click on the dropdown box to reference to a document already in your CaseWare file.||By inserting references to work performed on other working papers you ensure that your file is easy to follow and complies with ISAE3000.|
|Document settings||You will be guided to specify different document settings as well as to specify descriptions to be used in different documents.||By correctly setting the document settings, your engagement file will be tailored and descriptions in the specified letters will be tailored.|
|Date||You have to start by selecting whether you want to assess materiality for the attorneys trust account or not.|
By selecting ‘No’ you have to conclude on your selection.
By selecting ‘Yes’ you have to complete the rest of the document.
|By choosing to assess materiality or not, your engagement will be tailored and further procedures in the engagement file will be modified accordingly.|
The following will only be available if you chose to assess materiality:
|Basis for materiality||The possible bases for calculating materiality are available for selection here.||By deciding on the appropriate basis for materiality you will ensure a reliable materiality figure. Consideration needs to be given to which figure the user of the report will be interested in.|
|Min||You insert the lowest percentage for calculating materiality.||By inserting a min% the software will be able to provide you with a lower limit of an appropriate range of possible materiality amounts.|
|Max||You insert the highest % for calculating the parameters for final overall materiality.|
Percentages used for the benchmarks, e.g. the total assets minimum is 1.0% can all be modified in the Probe firm settings.
|By inserting a max% the software will be able to provide you with the upper limit for a range of possible materiality amounts.|
|Figures||The provisional current year’s figures (i.e. before audit adjustments) should be inserted here.||To ensure that the correct amounts are used for calculating materiality. |
|Selection tick box||You have to select the appropriate basis and figure to be used for assessing materiality by selecting at least one basis with the current or prior year figure.||By selecting the different bases and figure of materiality you will be able to calculate a reliable materiality figure.|
The following features are available in the document:
- Insert comment, click here for further information
- Delete comment, click here for further information
- Insert row at end of table, click here for further information
- Delete row, click here for further information
- Record risk, click here for further information
- Record events, click here for further information
You will be prompted if the preconditions for the assurance engagement are not present. You should discuss this with the engagement partner and document these discussions.
These four questions determine whether the preconditions for a reasonable assurance engagement on attorneys trust account(s) are present:
- Have we agreed the terms of the engagement with those charged with governance?
- Are we able to perform our work free of any scope limitations imposed by those charged with governance?
- Are the records necessary to complete the engagement Relevant, Complete, Reliable, Neutral and Understandable?
- Are the necessary records available in order for the auditor to complete the engagement?
The Engagement partner signs the document off. If an additional team member has been involved, e.g. managing partner or EQCR, you can provide for their sign-off by selecting the relevant option. (The descriptions for the additional partners can be changed in the Probe Firm Settings).
You have to conclude on this document after you have gained an understanding of the attorneys trust account(s) and its environment, answered all the questions, set the document settings and client information as well as determined whether to use the materiality figures or not, by signing off the document.
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