Preconditions for an Audit
Conditions Required Before Accepting an Audit
Professional standards require auditors to verify that certain preconditions exist before accepting an engagement. These conditions ensure that management understands its responsibilities and that an acceptable financial reporting framework will be used.
Tip
If management refuses to acknowledge its responsibilities, the auditor should generally decline the engagement.
Summary
Audit preconditions ensure both management and the auditor understand their respective responsibilities before work begins.