ACCA Advanced Audit and Assurance (AAA) Practice Exam

What is the main purpose of ISA 210 in the context of audit engagements?

1. To outline the auditor's rights during the audit

2. To agree on the terms of audit engagements

3. To determine the audit fees

4. To set a timetable for the audit

The correct answer is: To agree on the terms of audit engagements

The main purpose of ISA 210 is to agree on the terms of audit engagements. This standard emphasizes the importance of establishing a mutual understanding between the auditor and the client regarding the scope and objectives of the audit, as well as the responsibilities of both parties. Gathering and documenting the terms of the engagement is crucial as it helps prevent misunderstandings and disputes later on. It serves to clarify the aspects of the audit, such as the auditor’s responsibilities, the expected deliverables, and any limitations that may affect the audit process. While aspects like audit fees or timelines might be discussed in the context of the engagement terms, ISA 210 is particularly focused on establishing those agreed terms rather than setting specific fees or timetables. Thus, option B accurately captures the core objective of the standard.