The Audit
Blueprint:
2025/2026
Master
Survival
Guide
minimum reading. maximum marks. pure audit logic!
, SECTION 1: THE FOUNDATION (The Ethics &
Engagement Phase)
ISA 210: Agreeing the Terms of Audit Engagements
The engagement letter is the auditor’s “Shield.”
It prevents “Expectation Gap” (where the client thinks you are there to find every
R5 fraud, which you aren’t).
The 5 Mandatory Contents of an Engagement Letter:
Objective & Scope: What are we auditing? (e.g., The 2024 Financials).
Auditor’s Responsibilities: To express an opinion based on ISAs.
Management’s Responsibilities: Preparing the books, Internal Controls, and
providing ALL info.
The Framework: Are they using IFRS or IFRS for SMEs?
Report Format: The expected form and content of the final report.
EXAM ALERT: If management refuses to acknowledge their responsibility for
the Financial Statements, ISA 210 says you CANNOT accept the audit.
The Ethical Wall (The Code of Conduct)
Lecturers love testing “Threats.” You must identify the threat, explain why it’s a risk, and
provide a safeguard.
Self-Interest Threat: The auditor has a financial interest in the client (shares or a
big unpaid bill).
Self-Review Threat: You are auditing work you did yourself (e.g., you did their Tax
last month).
Blueprint:
2025/2026
Master
Survival
Guide
minimum reading. maximum marks. pure audit logic!
, SECTION 1: THE FOUNDATION (The Ethics &
Engagement Phase)
ISA 210: Agreeing the Terms of Audit Engagements
The engagement letter is the auditor’s “Shield.”
It prevents “Expectation Gap” (where the client thinks you are there to find every
R5 fraud, which you aren’t).
The 5 Mandatory Contents of an Engagement Letter:
Objective & Scope: What are we auditing? (e.g., The 2024 Financials).
Auditor’s Responsibilities: To express an opinion based on ISAs.
Management’s Responsibilities: Preparing the books, Internal Controls, and
providing ALL info.
The Framework: Are they using IFRS or IFRS for SMEs?
Report Format: The expected form and content of the final report.
EXAM ALERT: If management refuses to acknowledge their responsibility for
the Financial Statements, ISA 210 says you CANNOT accept the audit.
The Ethical Wall (The Code of Conduct)
Lecturers love testing “Threats.” You must identify the threat, explain why it’s a risk, and
provide a safeguard.
Self-Interest Threat: The auditor has a financial interest in the client (shares or a
big unpaid bill).
Self-Review Threat: You are auditing work you did yourself (e.g., you did their Tax
last month).
