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| Bangladesh Standard on Audit(BSA-210) |
What is the Bangladesh standard on Audit(BSA-210) ? Describes in details:
BSA-210: Agreeing the Terms of Audit Engagement is a standard issued by the Institute of Chartered Accountants of Bangladesh (ICAB). It outlines the auditor's responsibilities in agreeing upon the terms of an audit engagement with the client before starting the audit work.
In short, BSA-210 addresses the following key points:
1.Engagement Letter:
The auditor must agree on the terms of the audit engagement with the client. This is typically done through an engagement letter, which outlines the scope of the audit, the responsibilities of both the auditor and the client, and other terms related to the engagement.
2.Clear Understanding of Terms:
The engagement letter should clearly specify the objectives, responsibilities, and limitations of the audit, the applicable financial reporting framework, and the expected time frame for the audit. This helps in avoiding misunderstandings during the audit process.
3.Responsibilities of the Auditor:
The auditor's role is to express an opinion on the financial statements, and the engagement letter should clearly outline this role, including the auditor’s responsibility for detecting material misstatements, fraud, or errors.
4.Client’s Responsibilities:
The letter should also specify the client’s obligations, such as providing access to relevant records, information, and personnel, and ensuring that the financial statements are prepared in accordance with the relevant accounting standards.
5.Modifications to the Terms:
If there are any changes in the terms of the audit engagement (e.g., changes in scope or accounting framework), the auditor should obtain the client’s agreement to these changes and document them.
6.Re-Auditing and Continuing Engagements:
If the engagement is for a continuing audit, the auditor should ensure that the terms of the previous engagement are still valid or updated as necessary.
In summary, BSA-210 ensures that there is a mutual understanding between the auditor and the client about the terms and scope of the audit, which helps to establish clear expectations and reduce the risk of misunderstandings.