F8 - Audit Framework & Regulations

[Acid]

Hi,

Need your help .

In G T G Study text A4.8 , Section 4 What is meant by "An audit engagement occurs when an organization has enlisted the services of an accountant to conduct an audit. The accountant and the organization have worked out the terms and scope of the audit and documented..." .

I want to know what is meant by the "Organization" here . Is it the auditing firm or the business organization to be audited ?


Thanks

Acid

[Vanessa]

The term organisation refers to either a business entity or an auditing firm. This depends on the entity which wants to get its accounts audited.

If a business entity appoints an auditor to audit its accounts, “organisation” is a business entity.

However if an auditing firm wants to get its accounts audited, “organisation” is the auditing firm.