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N^ Management of Engagements by Russell E. Palmer V ) Today, as client organizations grow larger and the scope and depth of services provided by CPAs expands, it is essential that more emphasis be placed on the effective management of engagements. This need is emphasized in Statements on Auditing Procedure Number 33, "An auditor typically works within economic limits; his opinion, to be economically useful, must be formulated within a reasonable length of time and at reasonable cost." The ability to manage is especially important in view of the TRB&S integrated services approach. The job manager must constantly be aware of ways he can provide maximum service to the client within appropriate economic limits. Effective management, however, requires not only the efforts of the person primarily responsible for the engagement, but also effective utilization of management techniques by the staff member responsible for each area of the engagement. The qualities required in a person moving up in the public accounting profession change and shift in importance as the individual progresses. In day-to-day service to clients, however, the presence of two qualities is essential — the ability to manage effectively and technical competence. Initially a person entering the profession is mainly concerned with the latter, but as he accepts additional responsibility the ability to manage becomes increasingly important. This article outlines areas to be considered in managing an audit engagement. It is divided into four categories: Planning Controlling On-the-job Training Review and Completion PLANNING Preliminary review To be effective in planning the engagement, it is important that the individuals concerned have a knowledge of the client's industry. This knowledge provides the foundation for the business approach to the audit process. It enables the manager to ascertain areas of special audit significance, risk-type engagements and special staffing situations. It provides the auditor with industry information and ideas from which to formulate recommendations to the client. The individual can best gain this knowledge by reading trade publications and inter-firm industry information concerning the client's industry. Annual reports of other companies in the industry should be reviewed, and it is often advantageous to refer to the Firm Directory and communicate with other offices having clients in the same industry. The other office can furnish a program of examination, the letter of recommendations, audit techniques utilized, information concerning special services provided for the client, and other pertinent information on engagement management. Prior to the start of the field work, the in-charge accountant should review the previous year's working papers, memoranda, reports, the tax and correspondence files and the letter of recommendations. He should re-acquaint himself with disposition of the problems of the previous year, and review the permanent file and program of examination. He should also discuss the engagement with the supervisor or manager to assure himself that he is familiar with all current problems and information involving the client. MARCH, 1965 27
Object Description
Title |
Management of engagements |
Author |
Palmer, Russell E. |
Subject |
Management -- Accounting |
Personal Name |
Palmer, Russell E. |
Portrait |
Palmer, Russell E. |
Office/Department |
Touche, Ross, Bailey & Smart. Denver Office |
Citation |
Quarterly, Vol. 11, no. 1 (1965, March), p. 27-30, 48 |
Date-Issued | 1965 |
Source | Originally published by: Touche, Ross, Bailey & Smart |
Rights | Copyright and permission to republish held by: Deloitte |
Type | Text |
Format | PDF image with OCR under text, scanned at 400dpi |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi. Digital Accounting Collection |
Date-Digitally Created | 2009 |
Language | eng |
Identifier | Quarterly_1965_March-p27-30,48 |