Before accepting an engagement to audit a new client quizlet multiple B To conduct interviews with the partner and manager in charge of the predecessor public accounting firm's engagement Study with Quizlet and memorize flashcards containing terms like A public accounting firm that has been terminated or has voluntarily withdrawn from an audit engagement is known as the:, With respect to a predecessor auditor, a perspective auditor ______. Become a Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to obtain: An assessment of fraud risk factors likely to cause material misstatements. B) obtain the prospective client's signature to the engagement letter. d) Completely detailed audit plan. Which of the following is a risk factor for misappropriation of assets? (1) Generous performance-based compensation systems. Facts that might bear on management integrity. The firm will have to hire a specialist in one audit area. -A description of the limitations of an audit. The client's financial reporting system a. A preliminary understanding of the prospective client's control environment D. Study with Quizlet and memorize flashcards containing terms like When initiating communications with predecessor auditors, prospective auditors should expect: A. - obtain the prospective client's signature to the engagement letter D. B) The prospective client's signature to the representation letter. Advise the client to inform its audit committee of the possible misstatement. the predecessor's assessments of inherent risk and judgments about materiality. If management fails to modify prescribed internal controls for changes in information technology this concern could be so serious that the auditor concludes Before accepting an engagement to audit a new client, a CPA is required to obtain The prospective client's consent to make inquires of the predecessor auditor, if any. Management fails to modify prescribed controls for changes in conditions. , The Code of Professional Conduct does not allow an auditor to disclose Study with Quizlet and memorize flashcards containing terms like Materiality depends on the _____ and the _____ of the item, During the planning stage of an audit, the auditors establish an understanding with their client as to the nature of services to be provided and the responsibilities of the ______. A successor auditor should request the new client to authorize the predecessor auditor to allow a review of the predecessor's: a. The prospective client's consent to Study with Quizlet and memorize flashcards containing terms like 1. Require the client to restate its financial statements before proceeding with the audit. The prospective client's opinion on the fairness of the financial Before accepting an engagement to audit a new client, an auditor is required to When assessing the risks of material misstatement at a low level, an auditor is required to document the auditor's 8 of 201 Study with Quizlet and memorize flashcards containing terms like Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's A. B) The integrity of entity's management is suspect. Oct 2, 2024 · Study with Quizlet and memorize flashcards containing terms like Which of the following auditor concerns most likely could be so serious that the auditor would conclude that a financial statement audit cannot be conducted?, Before accepting an engagement to audit a new client, an auditor is required to:, When applying analytical procedures during an audit, which of the following is the best Study with Quizlet and memorize flashcards containing terms like Considered before accepting new client, Three Preliminary engagement activities, Determine the Audit Engagement Team Requirements (factors) and more. Before accepting an engagement to audit a new client, a CPA is required to obtain: A) an assessment of fraud risk factors likely to cause material misstatements. , An auditor may not accept a prospective client because the ______. Study with Quizlet and memorize flashcards containing terms like 3. to connect interviews with the partner and manager in charge of the predecessor public accounting firm's Before accepting an engagement to audit a new client, a CPA is required to obtain: an assessment of fraud risk factors likely to cause material misstatements. [. ↦ The correct answer is (d) the prospective client's consent to make inquiries of the predecessor, if Not the question you’re looking for? Post any question and get expert help quickly. prepare a memorandum setting forth the staffing requirements and documenting the preliminary Study with Quizlet and memorize flashcards containing terms like The first phase of audit planning is risk assessment. ]. , 2) Before accepting an engagement to audit a new client, an auditor is required to: A) make inquiries of the predecessor auditor after obtaining the consent of the prospective client. ) not be considered a Professional standards require auditors to reach a mutual understanding with clients concerning engagement requirements and expectations and to document this understanding, usually in the form of a written letter. Study with Quizlet and memorize flashcards containing terms like The first phase of the audit process that relates to audit planning is ______. preliminary engagement activities planning the audit client acceptance and continuance, Before accepting a new client, a public accounting firm must determine if it ______. Reconciling physical counts to perpetual records and general ledger balances. The prospective client's consent to make inquiries of the predecessor auditor, if any. An understanding of the prospective client's industry and business B. Study with Quizlet and memorize flashcards containing terms like Which of the following conditions most likely would pose the greatest risk in accepting a new audit engagement? a. To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits. The prospective client's signature to the representation letter. To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits b. and When a significant event occurs. Testing purchasing Before accepting an engagement to audit a new client, a CPA is required to obtain a. review the client's financial information before accepting the engagement If an entity has not previously been audited, the prospective auditor should ______. Which of the following matters do the auditor and management agree upon at this time?, Which of the following is required before accepting a new audit engagement? 1) Making inquiries of the predecessor auditor Study with Quizlet and memorize flashcards containing terms like 1. make inquiries of the predecessor auditor obtaining the consent of the prospective client b. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the:, In assessing whether to accept a client for an audit engagement, a CPA should Study with Quizlet and memorize flashcards containing terms like Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's a. The prospective client's consent Study with Quizlet and memorize flashcards containing terms like Prior to commencing fieldwork, an auditor usually discusses the general audit strategy with the client's management. Monday's predecessor auditor was Post, CPA, who has been notified by Monday that Post's services have been Study with Quizlet and memorize flashcards containing terms like 3. Study with Quizlet and memorize flashcards containing terms like Which of the following factors most likely would cause a CPA to decide not to accept a new audit engagement? A) The CPA's lack of understanding of the prospective client's internal audit function's audit plan B) Management's disregard of its responsibility to maintain an adequate internal control environment C) The CPA's Study with Quizlet and memorize flashcards containing terms like An auditor obtains knowledge about a new client's business and its industry in order to: a. Reporting internal control deficiencies to the audit committee c. opinion of any subsequent events occurring since the C. Discuss the management representation letter with the prospective client's audit committee. There are 2 steps to solve this one. (C) seek the SEC's permission to accept the engagement if Blakeney is publicly owned. an understanding of the prospective client's industry and business b. attempt to communicate with the predecessor auditor before accepting the engagement. the predecessor's evaluation of matters of continuing accounting significance. All matters of continuing accounting significance. had considered Study with Quizlet and memorize flashcards containing terms like The audit planning process should begin with the pre-engagement activities of client _________ and continuance. Consultation with the appraiser in this case would A. an assessment of fraud risk factors likely to cause material misstatements. Study with Quizlet and memorize flashcards containing terms like When initiating communications with predecessor auditors, prospective auditors should expect A To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits. , When a public company changes auditors ______. , Before accepting an engagement to audit a new client, a CPA is required to obtain A. Before accepting an engagement to audit a new client, an auditor is required to: (a) Make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Is an essential part of every engagement by the CPA, whether performing auditing, tax work, or other services. Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan D. An understanding of the prospective client's control environment d. , True or false. , Which of the following is correct concerning requirements about auditor Before accepting an engagement to audit a new entity, an auditor is required to A. the CPA lacks a thorough understanding of the prospective client's operations and industry c. , When an auditor is asked to accept a new client, ______. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to a. Study with Quizlet and memorize flashcards containing terms like To reduce the risk of accepting a new client, auditing standards require a prospective auditor to, When a public company changes auditors, it must, T/F: A prospective auditor must obtain information from the predecessor auditor to accept the client. the prospective client's signature to a written engagement letter. Study with Quizlet and memorize flashcards containing terms like This year, Wooten Enterprises engaged a new auditor who must:, Which of the following communications is most likely to be written before the balance-sheet date?, Which of the following is not a benefit claimed for the practice of determining materiality in the initial planning stage of an audit? and more. develop an attitude of professional skepticism concerning management's financial statement assertions. Multiple choice question. An understanding of the prospective client's industry and business. C. The prospective client's signature to the engagement letter c. obtain the prospective client's signature on the engagement letter. evaluate whether the aggregation of known Study with Quizlet and memorize flashcards containing terms like The process of working from financial statement figures back to detailed documents most directly addresses the financial statement assertion of:, According to the professional standards, auditors may document the understanding established with an audit client through a(n) Written communication with the clientOral Communication Before accepting an engagement to audit a new client, a CPA is required to obtain: a. C Before accepting an engagement to audit a new client, a CPA is required to obtain A. When a successor auditor is offered an auditing engagement, the successor auditor _____. Which of the following factors most likely would cause a CPA to not accept a new audit engagement? a. obtain the prospective client's signature to the engagement letter. C) a preliminary understanding of the prospective client's control environment. - make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to:, Which of the following procedures would a CPA most likely perform in the planning phase of a financial statement audit?, Which of the following matters does an auditor usually include in the engagement letter? and more. false, Auditors Study with Quizlet and memorize flashcards containing terms like Materiality depends on the ______ and the nature of the item. the prospective client has fired its prior auditor b. Staff will need to be rescheduled to cover this new client. Identifying related parties, Prior to accepting a new audit engagement, a public accounting firm should a. Requires a consideration of internal control. A preliminary understanding of the prospective client's industry and business b. Study with Quizlet and memorize flashcards containing terms like The probability that the firm could issue a clean, unmodified opinion when in fact a modified opinion should have been issued is referred to as___, Public accounting firms are ______. The prospective client's signature on the engagement letter. B) the prospective client's signature on the engagement letter. the prospective client's signature on the engagement letter c. engagement letter and audit working papers. Study with Quizlet and memorize flashcards containing terms like The first phase of the audit process that relates to audit planning is Blank_____. (B) reject the engagement if the change in auditors resulted from a dispute with the predecessor. Before accepting an engagement to audit a new client, an auditor is required to: A. a. Study with Quizlet and memorize flashcards containing terms like Before accepting a new client, a public accounting firm must determine if it, True or false: An auditor obtains an understanding of the client and its environment to identify audit risks that may result in material misstatements. 27 When initiating communications with predecessor auditors, prospective auditors should expect: a. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to, Before accepting an audit engagement, an auditor should make specific inquiries of the predecessor auditor regarding the predecessor's, Which of the following is correct regarding the communication between successor and predecessor auditors? and more. A representation letter from the prospective client Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to obtain: A. preliminary engagement activities client acceptance and continuance planning the audit, Select all that apply Before accepting a new client, a public accounting firm must determine if it Blank_____. make inquiries of the predecessor auditor after obtaining the consent of the prospective client. c. Prior to accepting the engagement, the firm must Study with Quizlet and memorize flashcards containing terms like True or false: The extent of effort that goes into evaluating a new client is normally much less than the decision to continue with an existing client. d. Make inquiries of the predecessor auditor B. Be considered a failure to follow generally accepted auditing standards because Kramer should have known how to value fine art before accepting the engagement. Surprise counts of the client's petty cash fund b. , Before accepting an engagement to audit a new client, an auditor is required to: A) make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Awareness of the consistency in the application of generally accepted accounting principles between periods. Before accepting an engagement to audit a new client, an auditor is required to a. make constructive suggestions concerning improvements to the client's internal control. To conduct interviews with the partner and manager in charge of the predecessor public accounting firm's Study with Quizlet and memorize flashcards containing terms like While clients are very particular about which auditor they will select, auditors are willing to accept any client due to the financial benefits they receive. the prospective client's consent to make inquiries Study with Quizlet and memorize flashcards containing terms like Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's:, Hill, CPA, has been retained to audit the financial statements of Monday Co. Requires a complete review of all transactions during the period under Before accepting an engagement to audit a new entity, an auditor is required to: make inquiries of the predecessor auditor. , 1. audit working papers. -must obtain the client's consent before discussing confidential information with the predecessor auditor-is granted permission to contact the predecessor auditor by default-is prohibited from accepting the engagement if communication with the predecessor auditor is denied by management Before accepting an engagement to audit a new client, a CPA is required to obtain An assessment of fraud risk factors likely to cause material misstatements. Before accepting an engagement to audit a new client, an auditor is required to: make inquiries of the predecessor auditor after obtaining the consent of the prospective client. The prospective client's signature to a written engagement letter. Performing a search for unrecorded liabilities d. an understanding of the prospective client's industry and business. Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding a. review the predecessor's audit documentation if the audit is to be in accordance with GAAS. only obligated to provide services for clients the firm has audited in the past obligated to provide services for any Study with Quizlet and memorize flashcards containing terms like Which of the following auditor concerns most likely could be so serious that the auditor would conclude that a financial statement audit cannot be conducted?, Before accepting an engagement to audit a new client, an auditor is required to, Which of the following steps should an auditor perform first to determine the existence of Study with Quizlet and memorize flashcards containing terms like 1. to take responsibility for obtaining the client's consent for the predecessor to give information about prior audits b. Projecting the deviation rate of a statistical sample to the population. There will be a client-imposed scope limitation. When initiating communications with predecessor auditors, prospective auditors should expect a. , Before accepting an engagement to audit a new client, a CPA is required to obtain:, The audit client's board of directors and audit committee refused to take any action with respect to an immaterial illegal act which was brought to their attention Study with Quizlet and memorize flashcards containing terms like which of the following auditor concerns most likely could be so serious that the auditor would conclude that the financial statement audit cannot be conducted, before accepting an engagement to audit a new client, an auditor is required to, which of the following steps should an auditor perform first to determine the existence of Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to obtain A. Attempt to contact the predecessor auditors b. Ask the client to arrange a meeting of the predecessor auditor, management, and the successor auditor to discuss the matter. Before accepting an engagement to audit a new client, a CPA is required to make inquiries of the predecessor auditor obtaining the consent of the prospective client obtain the prospective client's signature to the engagement letter Study with Quizlet and memorize flashcards containing terms like Materiality is based only on a quantitative analysis of the financial statements. , Select all that apply Before accepting a new client, a public accounting firm must determine if it Blank______. true b. Comparing inventory balances to recent sales activities. A successor auditor ordinarily should request to review the predecessors audit documentation relating to contingencies and internal control. become a member of the entity's Study with Quizlet and memorize flashcards containing terms like True or false. the CPA is unable to review the predecessor auditor's working papers due to a major fire that destroyed both hard and soft copy documentation d Which of the following should not normally be included in the engagement letter for an audit?-A description of the responsibilities of client personnel to provide assistance. ]has the capabilities to perform the audit [. The successor should specifically inquire about the predecessor's: Understanding as to the reasons for the change of auditors. , During the second stage of the audit process, auditors must obtain an understanding of Study with Quizlet and memorize flashcards containing terms like Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's, A written understanding between the auditor and the entity concerning the auditor's responsibility for fraud is usually set forth in a(n), If the independent auditors decide that it is Study with Quizlet and memorize flashcards containing terms like The auditors' understanding established with a client should be confirmed through a(an): a) Oral communication with the client. evaluation of all matters of continuing accounting significance. (2) Management preoccupation Study with Quizlet and memorize flashcards containing terms like 1. , The risk of loss or injury to the auditors' reputation by association with a client Study with Quizlet and memorize flashcards containing terms like Engagement Letters include all of the following except, Which of the following is not an audit procedure that is commonly used in performing tests of controls?, Although planning continues throughout the audit, it initially involves and more. Study with Quizlet and memorize flashcards containing terms like A common rule of thumb in practice is to use (blank) % of income before taxes as a materiality benchmark. ) be considered failure to follow generally accepted auditing standards because Kramer should have known how to value fine art before accepting the engagement C. , The Code of Professional Conduct does not allow an auditor to disclose This year, Blakeney Enterprise engaged a new auditor who must: (A) attempt to communicate with the predecessor auditor before accepting the engagement. Which of the following is true about appointing the external auditor after year-end? Quiz yourself with questions and answers for Audit - Quiz 2, so you can be ready for test day. seek the SEC's permission to accept the engagement if Wooten is publicly owned. Before accepting an engagement to audit a new client, a CPA is required to obtain Evaluate the severity of the deficiency on the auditor's control risk assessment for that assertion. , Risk management activities are undertaken Blank______. The prospective client's consent to make inquiries of the predecessor auditor. When the prospective client has previously been audited, auditing standards require that the successor auditor make certain inquiries of the predecessor auditor before accepting the engagement. D. D) Management fails to modify prescribed controls for changes in conditions. B) an understanding of the prospective client's industry and business. B. The prospective client's opinion on the work ethics of the predecessor auditor. , When the prospective client has previously been audited, auditing standards require that the successor auditor make certain inquiries of the predecessor auditor before accepting the engagement. A preliminary understanding of the prospective client's control environment. Make inquiries of the predecessor auditor. At or near the completion of the audit. The prospective client's signature to the engagement letter C. ) Which of the following auditor concerns most likely could be so serious that the auditor wouldconclude that a financial statement audit cannot be conducted?A) The entity has no formal written code of conduct. Tell the company whether or not the auditor is willing to issue a "clean" opinion C. opinion of any subsequent events occurring since the Study with Quizlet and memorize flashcards containing terms like Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's, A written understanding between the auditor and the entity concerning the auditor's responsibility for fraud is usually set forth in a(n), If the independent auditors decide that it is Before accepting an engagement to audit a new client, an auditor is required to: make inquiries of the predecessor auditor after obtaining the consent of the prospective client. c) Written or oral communication with the client. engagement letter. prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. had considered the integrity of the client's predecessor auditor has the Before accepting an engagement to audit a new client, an auditor is required to: - discuss the management representation letter with the prospective client's audit committee. Evaluation of all matters of continuing accounting significance. Study with Quizlet and memorize flashcards containing terms like True or false: The extent of effort that goes into evaluating a new client is normally much less than the decision to continue with an existing client. -A listing of the client's branch offices selected for testing. Tell the company whether or not the auditor is willing to issue a "clean" opinion. , When auditing a company with multiple locations, the amount of audit attention devoted to various Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new entity, an auditor is required to? A. b) Written communication with the client. , Before accepting a new client, a public accounting firm must determine if it (blank), When a public accounting firm is asked to accept a new client, and more. A thorough understanding of the prospective client's industry and business. Includes the preparation of a report of the CPA's findings. Before accepting an engagement to audit a new client, a CPA is required to obtain A. a preliminary Study with Quizlet and memorize flashcards containing terms like Which of the following matters generally is included in an auditor's engagement letter?, A successor auditor should request the new client to authorize the predecessor auditor to allow a review of the predecessor's: Engagement letter Working papers, Each of the following identifies one of the principal purposes of an auditor's This year, Wooten Enterprises engaged a new auditor who must: a. reject the Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to:, An engagement letter is used primarily to:, Which of the following types of transactions would be routine and computerized? and more. A successor auditor should always make inquiries of the predecessor auditor before accepting an audit engagement. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to, Which of the following is a correct statement regarding the nature and timing of communications between an accounting firm performing an initial audit of an issuer and the issuer's audit committee? A. , During the planning stage of an audit, the auditors establish an understanding with their client as to the nature of services to be provided and the responsibilities of the ______. prepare Before accepting an engagement to audit a new client, an auditor is required to: a. ) be considered as exercising proper due care B. false, Auditors are expected to contact the prior year's auditor, but before doing so are required to obtain management's permission. obtain the prospective client's signature to the engagement letter c. tell the company whether or not the auditor is willing to issue a "clean" opinion. b. at the conclusion of the audit engagement before issuing the audit report before beginning any audit engagement only during the audit Study with Quizlet and memorize flashcards containing terms like Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's: Multiple Choice awareness of the consistency in the application of generally accepted accounting principles between periods. the degree of cooperation the Management has a reputation for consulting with several accounting firms about significant accounting issues, Before accepting an engagement to audit a new client, a CPA is required to obtain: a. understanding as to the reasons for the change of auditors. the prospective client's Study with Quizlet and memorize flashcards containing terms like Which of the following will most likely indicate the existence of related parties? 1) writing down obsolete inventory prior to year end 2) failing to correct deficiencies in the client's internal control 3) an unexplained increase in gross margin 4) borrowing money at a rate significantly below the market rate, Which of the . discuss the management representation letter with the prospective client's audit committee. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to:, An engagement letter is used primarily to:, Which of the following types of transactions would be routine and computerized? and more. it would not be typical to allow a review of either the engagement letter or the audit working papers. and more. Explore quizzes and practice tests created by teachers and students or create one from your course material. To conduct interviews with the partner and manager in charge of the predecessor public accounting firm's Study with Quizlet and memorize flashcards containing terms like An auditor's engagement letter most likely will include a) Managements Acknowledgement of its responsibility for maintaining effective internal control b) The auditors preliminary assessment of the risk factors relating to misstatements arising from fraudulent financial reporting c) A request for permission to contact the client Kramer, CPA, consulted an independent appraiser regarding the valuation of fine art for a not-for-profit museum. Study with Quizlet and memorize flashcards containing terms like The first phase of audit planning is risk assessment. Before accepting an engagement to audit a new client, a CPA is required to obtain: A) An understanding of the prospective client's industry and business. The attest function: A. With few exceptions, the Code of Professional Conduct does not allow an auditor to disclose confidential client information Study with Quizlet and memorize flashcards containing terms like Hawkins requested permission to communicate with the predecessor auditor and review certain portions of the predecessor auditor's working papers. Not be considered a violation of generally accepted auditing standards because generally accepted auditing standards does not apply to not-for-profit entities. 26. C) Procedures requiring separation of duties are subject to Study with Quizlet and memorize flashcards containing terms like In planning and performing an audit, auditors are concerned about risk factors for two distinct types of fraud: fraudulent financial reporting and misappropriation of assets. , With few exceptions, the Code of Professional Conduct does not allow an auditor Study with Quizlet and memorize flashcards containing terms like Which of the following would be considered an analytical procedure? Multiple Choice a. When a new client is accepted or when an audit engagement continues from year to year, an engagement letter should be prepared. -An indication of the amount of the audit fee. 21. prepare a memorandum setting forth the staffing requirements and documenting the Before accepting an engagement to audit a new client, a CPA is required to obtain: A) an understanding of the prospective client's industry and business. An assessment of fraud risk factors likely to cause material misstatements. make inquiries of the predecessor auditor after obtaining the consent of the prospective client b. Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. , Before accepting an engagement to audit a new client, an auditor is required to A.
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