Tender Documents - Assurance Engagement

Tender Documents - Assurance Engagement

Tendering

Tendering is the process of quoting a fee for work before the work is carried out. Most tenders include a formal written document supported by an oral presentation. All presentations should be dynamic, professional and within the limits of the ethical framework.

Fill in the Blank

Tendering is a process of...

Multiple Choice

Most tenders include a formal written document supported by an oral presentation.

• True

• False

Matters to consider before tendering

When invited to tender, a firm must decide whether it wishes to take part in the tendering process.

Specific risks of being involved with the tender include:

# Wasted time if the audit tender is not accepted. The firm will not be paid for the time spent putting the tender proposal together.

# Setting an uncommercial fee in order to win the contract.

# Making unrealistic claims or promises in order to win the contract.

Multiple Select

Risks of tendering...

• Waste of time preparing the tender proposal

• Gain confidence in preparing tender proposal

• Next tender proposal more realistic

• Setting in uncommercial terms in the tender proposal

Tendering

• Do auditors want the work?

• Content of tender document

• Criteria to be considered

Information required for the proposal

The preparation of an engagement proposal document is an important step in obtaining new work.

Prior to drafting any proposals an audit firm should consider the following:

Open Ended

Prior to drafting any proposals an audit firm should consider the following:

# What does the potential client expect from its auditors?

# What timetable does the client expect: an interim audit followed by a final audit or a longer final audit after the year-end?

# By which date are the audited financial statements required?

# What are the company’s future plans, e.g. public flotation, expansion, contraction, concentration on certain markets?

# Are there any perceived problems with the potential client's current auditors?

# The format required by the prospective client.

Multiple Select

Information required prior to preparing tender proposal will include...

• Expectation of client

• Timeline & deadline by client

• Client's future plan

• Any perceived problems

• Format of reports required

The content of the tender proposal

Multiple Choice

The fee and how it has been calculated.

• Yes

• No

Multiple Choice

The nature, purpose and legal requirements of an audit.

• Yes

• No

Multiple Choice

An assessment of the requirements of the client.

• Yes

• No

Multiple Choice

An outline of how the audit firm proposes to satisfy those requirements and the assumptions made.

• Yes

• No

Multiple Choice

The proposed approach to the audit or audit methodology.

• Yes

• No

Multiple Choice

An outline of the firm and its personnel.

• Yes

• No

Multiple Choice

Quality control procedures of the firm including those relevant to the engagement.

• Yes

• No

Multiple Choice

The ability of the firm to offer other services.

• Yes

• No

Open Ended

Content of Tender Documents / Proposal... (put in as many key words you may remember...)