Performing the preliminary engagement activities specified in paragraph 6 at the beginning of the current audit engagement assists the auditor in identifying and evaluating events or circumstances that may adversely affect the auditor’s ability to manage and achieve quality at the engagement level in accordance with ASA 220.
Performing these preliminary engagement activities enables the auditor to plan an audit engagement in order to, for example:
Maintain the necessary independence and ability to perform the engagement.
Determine that there are no issues with management integrity that may affect the auditor’s willingness to continue the engagement.
Determine that there is no misunderstanding with the client as to the terms of the engagement.
Performing initial procedures on both client continuance and evaluation of relevant ethical requirements (including independence) at the beginning of the current audit engagement means that they are completed prior to the performance of other significant activities for the current audit engagement. For continuing audit engagements, such initial procedures often occur shortly after (or in connection with) the completion of the previous audit.