| 6. | In order to establish whether the preconditions for an audit are present, the auditor shall: |
| (a) | Determine whether the financial reporting framework to be applied in the preparation of the financial statements is acceptable; and (Ref: Para. A2-A10) |
| (b) | Obtain the agreement of management that it acknowledges and understands its responsibility: (Ref: Para. A11-A14, A21) |
| (i) | For the preparation of the financial statements in accordance with the applicable financial reporting framework, including where relevant their fair presentation; (Ref: Para. A15 -A15-2) |
| (ii) | For such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; and (Ref: Para. A16-A19) |
| (iii) | To provide the auditor with:2a |
| a. | Access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters; |
| b. | Additional information that the auditor may request from management for the purpose of the audit; and |
| c. | Unrestricted access to persons within the entity from whom the auditor determines it necessary to obtain audit evidence. |
| 2a Sections 499 and 500 of the Companies Act 2006 set legal requirements in relation to the auditor's right to obtain information. |
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