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Which of the following factors most likely would cause a CPA to decline to accept a new audit engagement? Which of the following factors most likely would cause a CPA to decide not to accept a new audit engagement? Management’s disregard of its responsibility to maintain an adequate internal control environment.
Which of the following factors most likely would cause a CPA to not accept? Which of the following factors would most likely cause a CPA to decide not to accept a new audit engagement? Management’s disregard for internal control.
What are the factors that an auditor need to consider before accepting a company as an audit client? Assuming independence and requisite technical abilities, the pre- acceptance evaluation of a prospective audit engagement normally focuses on three factors: 1) personal integrity of the prospective client’s management and principals, 2) presence of circumstances pointing towards unusual risks in the engagement or
Which of the following circumstances is most likely to cause an auditor to consider whether a material misstatement exists? Which of the following circumstances is most likely to cause an auditor to change an assessment of the risk of material misstatement of the financial statements due to fraud? Unusual discrepancies between the entity’s records and confirmation replies.
In relation to the final bullet point, if management impose a limitation on the scope of the auditor’s work in the terms of a proposed audit engagement, the auditor should decline the audit engagement if the limitation could result in the auditor having to disclaim the opinion on the financial statements.
Which of the following factors most likely would cause a CPA to decide not to accept a new audit engagement? Management’s disregard of its responsibility to maintain an adequate internal control environment.
An auditor’s engagement letter most likely will include: Management’s acknowledgment of its responsibility for maintaining effective internal control.
Client acceptance evaluation should include General Considerations, Management Integrity, Management Commitment to GAAP, Management Internal Control Consciousness, Financial Strength of the Client, and Other Risk Factors.
Which of the following circumstances most likely would cause an auditor to believe that material misstatements may exist in an entity’s financial statements? Accounts receivable confirmation requests yield significantly fewer responses than expected.
There are three common types of audit risks, which are detection risks, control risks and inherent risks.
Which of the following action s should the auditor take in response to discovering a deviation from the prescribed control procedure? Make inquiries to understand the potential consequence of the deviation.
Audit engagement should not be accepted under following circumstances: Serious limitations on scope. Financial reporting framework is unacceptable. Management refuses to provide agreement that it acknowledges its responsibility as regards financial statements.
Statement 3: If the auditor is unable to agree to a change of the engagement and is not permitted to continue the original engagement, the auditor should withdraw and consider whether there is any obligation, either contractual or otherwise, to report to other parties, such as the board of directors or shareholders,
Each audit engagement is unique, but most share the basic steps of preparation, planning, field testing, and audit procedures, as well as subsequently rendering the audit opinion.
Which of the following factors is least likely to affect the extent of the auditor’s understanding of the entity’s internal controls? The amount of time budgeted to complete the engagement. Knowledge necessary to plan the audit. Management may establish appropriate controls but not act on them.
Transactions between related parties commonly occur in the normal course of business. Examples of common transactions with related parties are: Sales, purchases, and transfers of real and personal property. Services received or furnished, such as accounting, management, engineering, and legal services.
Which of the following constitutes a potential risk associated with the use of information technology in an entity’s internal control structure? Unauthorized changes to systems. Which of the following is NOT a possible reason why a properly designed system of internal control my fail to prevent or detect fraud?
4. events disclosed in the financial statements cause the auditor to have substantial doubt about the entity’s ability to continue as a going concern.
Which of the following audit procedures most likely would provide assurance that a manufacturing entity’s inventory valuation is proper? Testing the entity’s computation of standard overhead rates.
All 3 components of audit risk may be assessed in quantitative terms such as percentages or in nonquantitative terms that range, for example, from high to low. A Risk of failing to discover material misstatements. B Assurance provided by substantive procedures. C Risk of misapplying auditing procedures.
Which of the following factors most likely would cause an auditor not to accept a new audit engagement? An inadequate understanding of the entity’s internal controls. The close proximity to the end of the entity’s fiscal year. Concluding that the entity’s management probably lacks integrity.
Under the element of “Acceptance and Continuance of Client Relationships and Specific Engagements”, there are three major components – Competency of the Firm, Compliance with Ethical Requirements, and Integrity of the Client.
The planned nature, timing, and extent of the risk assessment procedures; The planned nature, timing, and extent of tests of controls and substantive procedures;12 and. Other planned audit procedures required to be performed so that the engagement complies with PCAOB standards.
The engagement process refers to the initial interactions between the social worker and the client. By conveying respect and a nonjudgmental attitude toward the client from the beginning of the relationship, the social worker puts emphasis on to uncovering the client’s strengths over his weaknesses and limitations.
An engagement letter is sent by an auditor to his client, after the receipt of communication regarding his appointment, but preferably before the commencement of engagement, spewing out the extent of his responsibilities in order to avoid any misunderstanding with respect to his engagement and documents and confirming