ISA $315$ Identifying and assessing the risks of material misstatement through understanding the entity and its environment requires the auditor to perform risk assessment procedures which include obtaining an understanding of the entity and its environment, including its internal control.

Required

$($i$)$ Explain the purpose of risk assessment procedures. $4$ marks

$($ii$)$ Outline the sources of audit evidence the auditor can use as part of risk assessment procedures. $4$ marks

$7.$ You work as an Audit manager for Khumo Associates. Your audit firm has been appointed to audit Peacock Ltd for the year ended $31$ August $2021.$

Required to$-$

Describe the steps Khumo Associates should perform prior to accepting a new audit engagement. $(5$ marks$)$

$8.$ ISA $210$ Terms of Audit Engagements explains the content and use of engagement letters.