Financial Auditing: Engagement Letter, Reporting Instructions, Planning Meeting

Running head: FINANCIAL AUDITING
Financial Auditing
Name of the Student
Name of the University
Author’s Note

1FINANCIAL AUDITING
Table of Contents
Engagement Letter...........................................................................................................................2
Instructions for Reporting................................................................................................................2
Planning Meeting.............................................................................................................................2
Understanding about the Client.......................................................................................................3
History of the Client....................................................................................................................3
Business of the Client..................................................................................................................3
Industry of the Client...................................................................................................................3
Laws and Regulations..................................................................................................................3
Financial and Financial Reporting...............................................................................................4
Change in Accounting Policies....................................................................................................4
Materiality Calculation....................................................................................................................5
Analytical Procedures for Helping Determining Audit Risk Areas................................................6
Areas Identified with Higher Risk of Material Misstatements........................................................7
Timetable for Reporting..................................................................................................................9
Other Services and Business Advice.............................................................................................10
Basic Budget..................................................................................................................................10
References......................................................................................................................................11

2FINANCIAL AUDITING
Engagement Letter
According to ISA 300, it is the responsibility of the engagement partner and the other
major members of the audit engagement team to involve in the process of audit planning. For
this reason, the audit engagement team of SEGRO Plc needs to draft a Letter of Audit
Engagement and needs to ensure the signing of the audit client on this letter (ifac.org 2019). This
can be considered as one of the major documents in audit operations.
Instructions for Reporting
The audit team of SEGRO Plc needs to prepare a statutory audit report under the
Companies Act 2006 along with a supporting tax calculation for the consolidated financial
statements of the company. It can be expected that SEGRO Plc will publish the audited financial
statements and accounts in the Annual Report 2019. It is needed to mention it in this context that
the audit engagement team will not be responsible for issuing any other report of SEGRO Plc
(ifac.org 2019). The audit engagement team and the audit client must adhere to this requirement
of the audit profession.
Planning Meeting
As per ISA 300, it is needed for the audit engagement team to discuss all the aspects of
their audit engagement with the senior management team of the audit client and the same aspect
is applicable for SEGRO Plc (ifac.org 2019). A meeting has taken place between the audit
engagement team and the directors of SEGRO Plc for the purpose of the audit planning. Certain
members of the audit firm and SEGRO Plc attested the meeting minute; they are the Audit

3FINANCIAL AUDITING
Partner, Audit Manager, Managing Director and Financial Director. This needs to be considered
as an essential document for the audit planning purpose (ifac.org 2019).
Understanding about the Client
History of the Client
The former name of SEGRO Plc was Slough Estate. The company converted their
business to Real Estate Investment Trust at the time of the introduction of REITs in United
Kingdom (UK) in 2007. The company was founded in the year of 1920 (segro.com 2019).
Business of the Client
The main operation of SEGRO Plc can be seen in owning, developing and managing
warehouses along with industrial properties for their customers in the regions of UK and
Continental Europe (segro.com 2019). The presence of three aspects can be seen in the business
model of SEGRO Plc; they are buying assets and lands with the aim to add value, actively
managing the business portfolio through leasing space and servicing the customers, and selling
the assets in appropriate places with the aim to gain profits (segro.com 2019).
Industry of the Client
It needs to be mentioned that SEGRO Plc operates in the property industry of UK. This
particular industry is regulated in accordance with the Scottish and English land law. The
property industry in UK is considered as the largest property market Europe. The market size of
the commercial real estate market of UK is around 250 billion Euros. This industry is also
considered as one of the major contributors towards the economic development of the country.