Before accepting an engagement to audit a new client quizlet multiple. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to obtain:, 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?, Which of the following matters does an Study with Quizlet and memorize flashcards containing terms like Which of the following statements is correct concerning both an engagement to compile and an engagement to review a nonissuer's financial statements? A. In assessing whether to accept a client for an audit engagement, a CPA should consider the. false, Auditors are expected to contact the prior year's auditor, but before doing so are required to obtain management's Study with Quizlet and memorize flashcards containing terms like The first phase of audit planning is risk assessment. , When an auditor is asked to accept a new client, ______. The audit engagement decision is the Obtain the agreement of management that it acknowledges and understands its responsibilities. Establish an understanding with the potential client as to a preliminary measure of materiality. The audit will be conducted in Study with Quizlet and memorize flashcards containing terms like 1. 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 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. an understanding of the prospective client's industry and business. Which of the following is an element of the fraud diamond and is not an element of the fraud triangle? attempt to communicate with the predecessor auditor Study with Quizlet and memorize flashcards containing terms like Engagement letters include all of the following except: - A list of adjusting journal entries - Information about the audit fee - Arrangements involving the use of specialists - A list of additional services that will be provided, An auditor obtains knowledge about a new client's business and its 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 A. 2 Before accepting an engagement to audit a new client, a CPA is required to obtain A. indexing B. , With few exceptions, the discuss the timing of the audit procedures with the client's management. obtain the prospective client's signature to the engagement letter. 4 of 56. the client's financial reporting system has been in place A)You will have to start the audit after year-end B)You have never before audited a client in that industry C)You will not be able to get adequate resources to interpret financial records kept in a different language, or to go observe assets in the foreign location, before the audit deadline D)The background check reveals that the CFO has a $1 million Engagement Planning and Audit Evidence Learn with flashcards, games, and more — for free. understanding as to the 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. )chief operating officer. what are the 3 steps before the audit Study with Quizlet and memorize flashcards containing terms like Which of the following is/are the key means of communication for gathering information while assessing management integrity? A. The prospective The learning outcomes include the explanation of matters that should be considered and procedures that should be followed by a firm before accepting a new client, a new Q1: 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 There are four phases of an audit: -accepting the audit engagement. to take responsibility for obtaining the client's consent for the predecessor to give information about prior audits b. The prospective client refuses to let the predecessor auditor respond to Before accepting an engagement to audit a new client, a CPA is required to obtain: a. The prospective client's signature to a written Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to:, The Scope and nature of an auditors contactual obligation to a client is ordinarily set forth in the:, Which of the following statements would least likely appear in an auditors engagement letter? and more. 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 Study with Quizlet and memorize flashcards containing terms like The following are the preliminary engagement activities that shall be performed by the auditor at the beginning of the current audit engagement, except Performing procedures regarding the continuance of the client relationship and the specific audit engagement. make inquiries of the predecessor auditor after obtaining the consent of the prospective client b. Perceptions of others in regards to an auditor being unbiased is referred to as _____ in _____. Before the audit firm accepts a proposed engagement to provide non-audit services to an audit client, the audit engagement partner shall: (i) consider whether a reasonable third party would regard the objectives of the proposed engagement as being inconsistent with the objectives of the Study with Quizlet and memorize flashcards containing terms like In order to provide negative assurance with respect to a client's compliance with indenture provisions, auditors must have:, Auditors provide comfort letters to ___ to help fulfill their obligation to perform a reasonable investigation of the securities registration statement. at the conclusion of the audit engagement before issuing the audit report Study with Quizlet and memorize flashcards containing terms like 1) A measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued is the A) inherent risk. , The basis for opinion section of the audit report emphasizes the fact that the audit provides only ___ ___ that the financial statements contain no material Study with Quizlet and memorize flashcards containing terms like True or false: An auditor obtains an understanding of the client and its environment to identify audit risks that may result in material misstatements. , 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. , Risk management activities are undertaken Blank______. The client's standing in the business community. what if a Study with Quizlet and memorize flashcards containing terms like 27. seek the SEC's permission to accept the engagement if Wooten is publicly owned. prepare Before accepting an engagement to audit a new client, an auditor is required to A. The prospective client's signature to the representation letter. Make inquiries of the predecessor auditor after obtaining the consent of the prospective client. The successor A measure of the auditor's assessment of the likelihood that there are material misstatements in an account before considering the effectiveness of the client's internal control is called: control risk. The prospective client’s consent to make inquiries of the predecessor auditor. Factors to consider before accepting new client-necessary resources and understanding financial reporting framework?-any independence The risk that auditors use audit procedures that are inappropriate. how to set their audit fees D. , Which of the following should not be included in an engagement letter?, Auditor risk assessment procedures are used to ______. The new controller not take part in any discussions regarding the retention of the audit form. -The letter states the: 1. , Which of the following is NOT a step involved in making any decision?, True or false: It is always a violation of professional ethics to accept management's method of Study with Quizlet and memorize flashcards containing terms like "Those charged with governance" in auditing standard, Ethical requirements of independent audit engagement, What need to be obtained before accepting audit engagement and more. , An auditor may not accept a prospective client because the ______. The attest function: A. Make inquires of the predecessor auditor after obtaining the consent of the prospective client B. Relevant to ACCA Qualification Paper P7 The syllabus for Paper P7, Advanced Audit and Assurance includes Professional Appointments (syllabus reference C4). understanding as to the reasons for the change of auditors. To conduct interviews with the partner and manager in charge of the 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. , Auditors are 6 Accepting new audit engagements. the prospective client's Study with Quizlet and memorize flashcards containing terms like The study of moral principles and values that govern the actions and decisions of an individual or group is ______. if current clients should be retained C. The prospective client's signature to a written engagement letter. Successor auditor will talk to predecessor auditor before accepting engagement and after acceptance but before beginning work. Study with Quizlet and memorize flashcards containing terms like Which of the following categories of principles is most closely related to gathering audit evidence? A. A description of the responsibilities of client personnel to provide assistance. The learning outcomes include the explanation of matters that should be considered and procedures that should be followed by a firm before accepting a new client, a new engagement for an Study with Quizlet and memorize flashcards containing terms like The audit planning process should begin with the pre-engagement activities of client _________ and continuance. 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. , 2) The first phase in 201 Multiple choice questions. , The auditor's report is generally addressed to the: a. Which of the following is the most important reason for an auditor to gain an understanding of an audit client's system of internal control over financial reporting? to plan the audit and determine the nature, timing, and extent 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. Management fails to modify prescribed controls for changes in conditions. A7 QC section 10 requires the firm to obtain information considered necessary in Before accepting an engagement to audit a new client, an auditor is required to make inquiries of the predecessor auditor without need to obtain the consent of the Assuming independence and requisite technical abilities, the pre- acceptance evaluation of a prospective audit engagement normally focuses on three factors: 1) personal integrity 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 71. Public accounting firms are _____. For an auditor of a nonissuer, this understanding generally includes** A. An indication of the amount of the audit fee. An auditor may not accept a prospective client if the client refuses to allow contact with the _____ auditor or if the entity has unusual Study with Quizlet and memorize flashcards containing terms like The risk that the auditors' procedures will lead them to conclude that a material misstatement does not exist in an account balance when in fact such a misstatement does exist is referred to as: Control risk. The predecessor's evaluation of matters of continuing Quality Control for an Engagement 131. The CPA is unable to review the Quiz yourself with questions and answers for Exam 1 External Auditing - Multiple Choice Questions, so you can be ready for test day. , In comfort letters, Study with Quizlet and memorize flashcards containing terms like Audit Standards require auditors to perform due _____prior to accepting or continuing with a client. 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. D. Be considered a failure to follow GAAS because Kramer should have known how to value fine art before accepting the - When the prospective client has been audited before, successor auditor makes inquiries to previous auditor before accepting the engagement - Successor should ask permission of the client because Code of Professional Conduct does not allow an auditor to disclose confidential client info Ask about: - Integrity of management - Disagreements with 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. C) Rate of change in the entity's industry is rapid. a. C) help Study with Quizlet and memorize flashcards containing terms like 11. A preliminary understanding of the prospective client's control environment. An auditor is planning an audit engagement for a new client in a business that is unfamiliar to the auditor. Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding: a. A description of the limitations of an audit. The CPA is unable to review the Before accepting an engagement to audit a new client, an auditor is required to. A new theory called the fraud diamond has been proposed. This understanding generally includes, Which of the 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. 21. Which of the following is a risk factor for misappropriation of assets? a) Generous performance-based compensation before beginning any audit engagement. Which of the following is a risk factor for misappropriation of assets? (1) Generous performance-based compensation 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. Which of the following factors 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?, Which of the following statements is correct with regard to the predecessor-successor communications?, Which of the following statements best represents the reason why 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. this determination is typically made by an experienced auditor who is in a position to make important decisions. Examples of such comparisons would not include: (A) current and prior inventory to details of purchases -An engagement letter is used to formalize the arrangement reached between the auditor and client. Responsibilities of the auditor and management 2. attempt to communicate with the predecessor auditor before accepting the engagement. 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. Before accepting an engagement to audit a new client, an auditor is required to: a. client acceptance and continuance planning the audit preliminary engagement activities, Select all that apply When an auditor is asked to accept a new client, _____. obtain the prospective client's signature to the engagement letter c. To do so, public accounting firms undertake several activities before beginning any audit engagement. Study with Quizlet and memorize flashcards containing terms like Risk management activities are undertaken Blank_____. The client find a new audit Study with Quizlet and memorize flashcards containing terms like 1. Includes the preparation of a report of the CPA's findings. Which of the following factors most likely would cause a CPA not to accept a new audit engagement? A. To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits B. new, new. The CPA's lack of understanding of the prospective client's internal audit function's audit plan. before beginning any audit engagement before issuing the audit report only during the audit fieldwork at the conclusion of the audit engagement, The probability that the firm could issue a clean, Study with Quizlet and memorize flashcards containing terms like A public accounting firm should investigate a prospective client prior to accepting the engagement. 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. Study with Quizlet and memorize flashcards containing terms like client acceptance, client continuance, preliminary engagement procedures and more. Before accepting an audit engagement, a 10 Multiple choice questions. An auditor obtains knowledge about a new client's business and its industry to a. All rules apply to CPAs in public practice. , The engagement letter should include a copy of the audit program outlining how the auditor intends to perform the audit. We focus on the decision of the auditing firm. ) stockholders of the company. the auditor decides whether to accept a new client or continue serving an existing one. B) the prospective Before accepting an engagement to audit a new client, an auditor is required to: A)make enquiries of the predecessor auditor after obtaining the consent of the prospective client. c. C. Is an essential part of every engagement by the CPA, whether performing auditing, tax work, or other services. Reasonable assurance. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the, In assessing whether Multiple Choice Questions 3 (#1-33) Learn with flashcards, games, and more — for free. Performance. Reporting. B To conduct interviews with the partner and manager in charge of the Before accepting an engagement to audit a new client, an auditor is required to A. The CPA is unable to review the 26. 6. To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the, In assessing whether to accept a Study with Quizlet and memorize flashcards containing terms like 1. A successor auditor's inquiries of the predecessor auditor should include questions regarding. , Public accounting firms should Study with Quizlet and memorize flashcards containing terms like Which of the following is the most likely first step the auditors would perform at the beginning of an initial audit engagement? Tour the client's facilities and review the general records. The successor auditor should also request to 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. B) acceptable audit risk. B) the prospective client's signature on the engagement letter. auditor's Study with Quizlet and memorize flashcards containing terms like Giving each electronic and paper document a number, like a book page number so it can be found, removed and replaced without loss is called A. the prospective client's consent to make inquiries of the predecessor, if 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. 70 of 152. The degree of cooperation the predecessor received concerning the inquiry of the client's lawyer B. Before accepting an engagement to audit a new client, an auditor is required to, 3. Which of the following factors most likely would cause a CPA to not accept a new audit engagement? The prospective client has fired its prior auditor. 1--accepting the audit engagement 2--planning the audit 3--performing audit tests 4--reporting the findings The audit engagement decision is the result of two sets of decisions: the prospective client’s and the proposed audit firm’s. Quizlet for Schools; Language 1. communication with the previous auditor, only B. Which of the following is a risk factor for misappropriation of assets? (1)Generous performance-based compensation Before accepting an engagement to audit a new client, an auditor is required to. develop an attitude of professional skepticism concerning management's financial statement assertions. Inherent risk. Identify the specific procedures that Morgan should follow in deciding whether to accept Study with Quizlet and memorize flashcards containing terms like Which of the following topics is not normally included in an engagement letter? A. -When a new client is accepted or when an audit engagement continues from year to year, an engagement letter should be prepared. An assessment of fraud risk factors likely to cause material misstatements. Detection risk. , 1. •Auditors must always exercise significant care because accusations of fraud are taken very seriously by audit clients. Account risk. 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. Study with Quizlet and memorize flashcards containing terms like True or False: Before accepting a new client, the auditor is required to conduct a background check on top management. , Which of the following is not related to ethical requirements of auditors? A. The primary reason for accepting or not accepting an audit engagement is _____. -It serves as a contract that outlines the responsibilities of both parties and is intended to prevent misunderstandings between the two parties. Before accepting an engagement to audit a new client, an auditor is required to. -- can require reviews of work for all of a firm's clients -- cannot prohibit firms from accepting new audit engagements -- mainly deals with cases involving Big Four firms -- can impose monetary penalties on both firms and individuals, AICPA Study with Quizlet and memorize flashcards containing terms like Comparing data on separate files can be accomplished by using computer-assisted audit techniques (CAATs) to determine whether comparable information is in agreement. B) help the successor auditor to evaluate whether to accept the engagement. the number of auditors to use for an engagement. To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits b. accepted a large sum of money from a client in exchange for a favorable audit report. In general, 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. B) Management's disregard of its responsibility to maintain an adequate Study with Quizlet and memorise flashcards containing terms like Per CAS 220, which information needs to be considered in determining whether the acceptance of continuance of a prospective client is appropriate?, Procedures to Gauge the Integrity of a Prospective or Existing Client, Accepting a New Engagement and others. Which of the following is a risk factor for misappropriation of assets? a) Generous performance-based compensation Study with Quizlet and memorize flashcards containing terms like Planning the audit is the:, 3 main reasons for properly planning an audit:, Audit must develop a plan that includes these components: and more. the audit client's comprehensive internal audit Before accepting an engagement to audit a new client, a CPA is required to obtain: A) the prospective client's signature on the engagement letter. Requires a consideration of internal control. The client's financial ability. Facts that might bear on the integrity of management. Prepare a rough draft of the financial statements and of the auditors' report. All rules apply to CPAs in business CPAs. Study with Quizlet and memorize flashcards containing terms like 1. To conduct interviews with the partner and manager in charge of the Before accepting an engagement to audit a new entity, an auditor is required to: make inquiries of the predecessor auditor. Study with Quizlet and memorize flashcards containing terms like When initiating communications with predecessor auditors, prospective auditors should expect: A. review the predecessor's audit documentation if the audit is to be in accordance with GAAS. cross- referencing, To plan the nature timing and extent further audit procedures to be preformed , an auditor should Before accepting an engagement to audit a new client, an auditor is required to a. Disagreement which the predecessor had with the client concerning auditing procedures and accounting principles c. With few exceptions, the Code of Professional Conduct does not allow an auditor to Study with Quizlet and memorize flashcards containing terms like The preliminary engagement activities include all of the following except:, Which of the following statements best represents the reason why auditors prepare engagement letters to be signed by their auditees?, When establishing an understanding with the entity regarding the terms of the Study with Quizlet and memorize flashcards containing terms like Which statement is correct relating to a potential successor auditor's responsibility for communicating with the predecessor auditors in connection with a prospective new audit client? A. 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. -planning the audit. related b. d. , Public accounting firms are _____. Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. clients B. 27 When initiating communications with predecessor auditors, prospective auditors should expect: a. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the:, In assessing whether to accept 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 A. Study with Quizlet and memorize flashcards containing terms like 3. The successor auditor has the responsibility to initiate contact with the predecessor auditor to ask about the client before the engagement is accepted; the When a successor auditor is offered an auditing engagement, the successor auditor _____. B. Giving an opinion on a prize promoter's claims about the amount of sweepstakes prizes awarded in the past. Study with Quizlet and memorize flashcards containing terms like 11. and more. , 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 _____, True or false: Public accounting firms devote Study with Quizlet and memorize flashcards containing terms like 1. Which of the following factors most likely would cause a CPA to not accept a new audit engagement? A. true b. ) chief financial officer. Due care. Flashcards; Learn; Test; Public accounting firms devote substantial time to make sure their audit clients are not likely to become the focus of an accounting scandal. , The Code of Professional Study with Quizlet and memorize flashcards containing terms like The scope and nature of an auditor's contractual obligation to a client is ordinarily set forth in the, An auditor is required to establish an understanding in writing with a client regarding the services to be performed for each engagement. The client's probability of achieving an Before accepting a new client engagement, an auditor should: a. the auditor identifies why the Study with Quizlet and memorize flashcards containing terms like Audit Standards require auditors to perform due _____ prior to accepting or continuing with a client, Public accounting firms undertake several activities called _____ management activities, before beginning any audit engagement. . Make inquiries of the predecessor auditor after obtaining the consent of the prospective client. 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. Study with Quizlet and memorize flashcards containing terms like planning, risk, inherent and more. -This letter sets forth the understanding with the client, including in particular (1) the objectives of the engagement, (2) management's responsibilities, (3) the auditors' responsibilities, and (4) any limitations of 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 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. 1 / 82. When initiating communications with predecessor auditors, prospective auditors should expect a. 26 of 334. 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 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. All matters of continuing accounting significance. D) financial risk. Select all that apply. , Before accepting an engagement to audit a new entity, an auditor is required to: a. There will be a client-imposed scope limitation. A successor auditor may perform which of the following for a new audit client? There Study with Quizlet and memorize flashcards containing terms like During the second stage of the audit process, auditors must obtain an understanding of the nature of _____ _____ because it allows them to identify accounts and classes of transactions that may be misstated and to tailor audit procedures to the existing system, The risk of material 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. Multiple Selections the auditor must ask An audit client hires a member of the audit engagement team to be its new controller. Correct Study with Quizlet and memorize flashcards containing terms like The purpose of the requirement in having communication between the predecessor and successor auditors is to: A) allow the predecessor to disclose information which would otherwise be confidential. Definition. Giving an opinion on the conformity of the financial statements of a university with generally When a client has multiple locations, the auditor determines which locations or business units to audit and the extent of the audit procedures to be performed during the _____ process. Term. management integrity. An understanding of the prospective client’s industry and business. Preconditions. The prospective client's signature on the engagement letter. Evaluating a prospective client requires which of the following actions?, 3. 15 Iftheengagementpartnerobtainsinformationthatwouldhavecaused the firm to decline the audit engagement had that information 2. B) obtain the prospective client's signature to the engagement letter. The prospective client's signature to the engagement letter C. 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. prepare a memorandum setting forth the staffing requirements and documenting the preliminary Study with Quizlet and memorize flashcards containing terms like Morgan, CPA, is approached by a prospective audit client who wants to engage Morgan to perform an audit for the current year. the order wants to make this decision early before incurring any significant cost that cannot be recovered 2. The successor auditors have no responsibility to contact the predecessor auditors. Not all rules apply to CPAs in public practice. An Before accepting an engagement to audit a new client, a CPA is required to obtain A. 8 Before accepting an engagement to audit a new client, an auditor is required to A. In assessing whether to accept a client for an audit engagement, an auditor should consider the A. Study with Quizlet and memorize flashcards containing terms like Auditor's responsibilities before accepting new audit engagement?, engagement letter, what would cause an auditor to not accept a new engagement? and more. -reporting the findings. All rules apply to CPAs in unemployed CPAs. A schedule of individual audit team member 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. review the client's financial information before accepting the engagement not accept the audit engagement accept the audit engagement without any investigation Study with Quizlet and memorize flashcards containing terms like In assessing whether to accept a client for an audit engagement, a CPA should consider the:, Which of the following factors most likely would lead a CPA to conclude that a potential audit engagement should not be accepted?, Although planning continues throughout the Study with Quizlet and memorize flashcards containing terms like List and describe the required pre-engagement activities that auditors undertake before beginning an audit engagement. , When an auditor is asked to accept a new client, ___ and ___(2 things), When should the evaluation of client continuance take place? (2 times) Question: Before accepting an engagement to audit a new client, a CPA is required to obtain:Multiple Choicean assessment of fraud risk factors likely to cause material misstatements. Develop an attitude of professional skepticism concerning management's financial statement Study with Quizlet and memorize flashcards containing terms like In addition to descriptions of the nature, timing, and extent of planned risk assessment procedures and planned further audit procedures, which of the following additional pieces of information should be documented in the audit plan? 1)Procedures performed to assess independence and 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. Evaluation of all matters of Before accepting an engagement to audit a new client, a CPA is required to obtain: a. D) 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 Ordinarily, the predecessor auditor permits the auditor to review the predecessor's audit documentation relating to 1) Contingencies 2) Balance Sheet Accounts Study with Quizlet and memorize flashcards containing terms like An audit engagement letter should normally exclude the following matter of agreement between the public accounting firm and the client:, For all audits of financial statements filed with the Securities and Exchange Commission, which of the following is required?, Which of the following is 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 A. . Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's: A) A new client with no prior audit history. Which of the following activities would be the most helpful to a CPA in deciding whether 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. whether to accept new clients and if current clients should be retained. Consultation with the appraiser in this case would a. The new controller sever all relations with the CPA firm, including any retirement funds. Most fraud investigators utilize the fraud triangle theory. Which of the following matters is generally included in auditor's engagement letter? a. To conduct interviews with the partner and manager in charge of the 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. When an auditor is asked to accept a new client, 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. An understanding of the prospective client's industry and business. The predecessor's evaluation of matters of continuing accounting significance b. , The substantive approach to an audit Study with Quizlet and memorize flashcards containing terms like Learning Auditing essentially helps you understand how to gather nd asses evidence so you can evaluate BLANK (or claims) made by others, The broadest category of independent professional accounting services intended to help decision makers by improving the quality or context Study with Quizlet and memorize flashcards containing terms like The first phase of audit planning is risk assessment. , The Code of Study with Quizlet and memorize flashcards containing terms like Pre-Engagement Activities, professional standards state that the auditor should perform the following activities:, Client Acceptance or Continuance and more. The prospective client's 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. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the A. B) Management's disregard of its responsibility to maintain an adequate Contingencies: Yes; Internal control: Yes The successor auditor should ask the client to authorize the predecessor auditor to allow the successor auditor to review the predecessor auditor's working papers relating to contingencies in order for the successor auditor to become aware of potential audit issues. -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 “Disengaging a tax client on the day before the tax returns are due is typically not wise, nor is disengaging from a public company audit client the day before the 10-K is due. If the preconditions for an audit are not present, the auditor should Study with Quizlet and memorize flashcards containing terms like What is the first stage of any audit?, What factors do we consider for client acceptance or continuance Acceptance and Continuance of Client Relationships and Audit Engagements (Ref: par. discuss the management representation letter with the prospective client's audit committee. Obtain the prospective client's signature to Study with Quizlet and memorize flashcards containing terms like When initiating communications with predecessor auditors, prospective auditors should expect:, Generally accepted auditing standards require that auditors always prepare and use:, When planning an audit, which of the following is not a factor that affects auditors' decisions about the Before accepting an engagement to audit a new client, a CPA is required to obtain A. What is the goal of engagement planning? What are the planning requirement under AS 9 and AU 300? (Basic Risk Management) When changing auditors what are some issues related to pre-engagement arrangements? Before accepting Study with Quizlet and memorize flashcards containing terms like The stages of the financial statement audit, Acceptance & Continuance stage, First step - assess client integrity and more. before beginning any audit engagement. 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, true or false: a public accounting firm should investigate a prospective client prior to accepting the engagement, Select all that apply: A public If an entity has not previously been audited, the prospective auditor should _____. Obtain the prospective client's signature to the engagement letter C. inherent risk. Evaluate management's integrity through review of the management representation letter. Make constructive suggestions concerning improvements in the client's internal control structure. communication with client personnel and with the client's industry peers, only C. make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Be considered as exercising proper due care. The CPA lacks a thorough understanding of the prospective client's operations and industry. Making inquiries of the predecessor auditor regarding management integrity. awareness of the consistency in the application of generally accepted Study with Quizlet and memorize flashcards containing terms like Which of the following situations would be most likely to cause a CPA to not accept a new audit engagement?, A predecessor auditor will ordinarily initiate communication with the successor auditor: Prior to the Successor's Acceptance of the Engagement: A Yes B Yes C No D No Subsequent 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) statistical risk. 27 When initiating communications with predecessor auditors, prospective auditors should expect a. Adequacy of the preplanned audit In assessing whether to accept a client for an audit engagement, a CPA should consider. statistical risk. Study with Quizlet and memorize flashcards containing terms like Successor auditors need to communicate with predecessor auditors ______ accepting the engagement, _______ auditors must ask management to authorize the predecessor auditors to discuss confidential information, If predecessor auditors refuse communication, successor Study with Quizlet and memorize flashcards containing terms like When an audit specialist is engaged during an audit, it is best to hire someone who is ___________ to the company under audit. independent; appearance. evaluation of all matters of continuing accounting significance. Analysis of balance sheet accounts. , A predecessor auditor will ordinarily initiate Study with Quizlet and memorize flashcards containing terms like 3. Client responsibilities regarding the audit. staff will need to be rescheduled to cover this new client b. Assess the auditor's ability to appropriately staff the potential engagement. Client acceptance/retention decisions are critical due to Before accepting an engagement for an initial audit, including a reaudit engagement, the auditor should request management to authorize the predecessor auditor to respond fully to the auditor's inquiries regarding matters that will assist the auditor in determining whether to accept the engagement. the prospective client's signature to a written engagement letter. Top creator on Quizlet True or false: Before accepting a new audit client, the auditor is required to conduct a background check on top management. To conduct interviews with the partner and manager in charge of the Study with Quizlet and memorize flashcards containing terms like 1. 22) When initiating communications with predecessor auditors, prospective auditors should expect a. Which of the following forms of advertising is permissible, 2. ) securities and exchange commission. The accountant should obtain a written management Study with Quizlet and memorize flashcards containing terms like Which of the following is true of the rules of the Code? Multiple choice question. , An auditor's independence would be considered impaired if the _____. The client's relations with its previous CPA firm. Multiple choice question. the firm will have to hire a specialist in one audit area c. the prospective client's signature to a written engagement letter. Before accepting an engagement to audit a new client, a CPA is required to. Sarbanes-Oxley rules require that: A. A listing of the client's 3. A written understanding between the auditor and the client concerning the auditor's responsibility for the discovery of illegal 3. Consult with and review the Study with Quizlet and memorize flashcards containing terms like what are the pre-engagement audit activities?, what is the purpose of communication with the predecessor auditor before beginning a new engagement?, before accepting a new engagement, is the firm required to contact the predecessor audit firm? and more. Study with Quizlet and memorize flashcards containing terms like Materiality is based only on a quantitative analysis of the financial statements. 20 Multiple choice questions. , What sources of information can auditors use in connection with deciding whether to accept a new client?, Why do predecessor auditors need to obtain Study with Quizlet and memorize flashcards containing terms like The first phase of audit planning is risk assessment. There may be instances where this needs to be done, but usually the grounds upon which the accountant is going to decide to disengage are or should be known well 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 D. The auditor's responsibility for determining the preliminary Study with Quizlet and memorize flashcards containing terms like Which of the following should not normally be included in the engagement letter for an audit? a. C) a preliminary understanding of the prospective client's control environment. Inquiry of 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. The prospective client has fired its prior auditor. A. Analysis of income Which of the following should the auditors obtain from the predecessor auditors before accepting an audit engagement? Multiple Choice Analysis of balance sheet accounts. to connect interviews with the partner and manager in charge of 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. make constructive suggestions concerning improvements to the client's internal control. A listing Study with Quizlet and memorize flashcards containing terms like The following are considered by a CPA firm in deciding whether to accept a new client, except: A. -performing audit tests. Evaluating compliance with 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. A preliminary understanding of the prospective client's control 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 Study with Quizlet and memorize flashcards containing terms like 3. Which of the following is a risk factor for misappropriation of assets? Generous performance-based compensation 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. communication with Study with Quizlet and memorize flashcards containing terms like A public accounting firm should document independence compliance by having all personnel complete an annual, Overall responsibility for an audit engagement rests with the, When an auditor is asked to accept a new client and more. 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 the audit process that relates to audit planning is _____. An auditor would least likely initiate a discussion with a client's audit committee concerning: a disagreements with management as to accounting principles that were resolved during 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. B) an understanding of the prospective client's industry and business. acceptable audit risk. element of a public accounting firm's quality control policies 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. Analysis of income statement accounts. The prospective client's unwillingness to Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor’s: A) Awareness of the 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 an understanding of the prospective client's industry and business. Responsibilities. Management's responsibility for the entity's compliance with laws and regulations. Ordinarily, the predecessor auditor permits the auditor to review the predecessor's audit documentation relating to Study with Quizlet and memorize flashcards containing terms like Analytical procedures are seldom used during the risk assessment stage of an audit engagement because they are substantive procedures. To conduct interviews with the partner and manager in charge of the Study with Quizlet and memorize flashcards containing terms like Question: 1 **An auditor is required to establish an understanding with a client regarding the services to be performed for each engagement. A request that the client sign a copy of the letter. The accountant should obtain a written management 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. , CPAs are 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 B. unrelated, An "eyes-open" approach of looking for anything unusual that can raise questions related to evidence that needs to be obtained is called Study with Quizlet and memorize flashcards containing terms like 3. The prospective client's consent to make inquiries of the predecessor auditor. Before accepting an engagement to audit a new entity, an auditor is required to?, 2. not obligated to provide services for any new or existing client. Before accepting an engagement to audit a new client, a CPA is required to obtain A. To conduct interviews with the partner and manager in charge of the This year, Wooten Enterprises engaged a new auditor who must: a. 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? 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. (T/F), Which of the following should an auditor obtain from the predecessor auditor prior to accepting an audit engagement? A. ) make inquiries of the Study with Quizlet and memorize flashcards containing terms like Which of the following statements is correct concerning both an engagement to compile and an engagement to review a nonissuer's financial statements? A. Deciding - whether to accept/continue the audit engagement 2)Conducting independence threat analysis 3)Identifying the client's Study with Quizlet and memorize flashcards containing terms like The PCAOB _____. 14). The accountant expresses no assurance on the financial statements. , The auditors' tests of controls are designed to substantiate the fairness of specific financial statement accounts. Awareness of the consistency in the application of generally accepted accounting principles between periods. shared confidential client information with a competitor. Study with Quizlet and memorize flashcards containing terms like Which of the following should not normally be included in the engagement letter for an audit? a. Client continuance 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. opinion of any subsequent events occurring since the predecessor's audit report was issued. , Before accepting an engagement to audit a new client, an auditor is required to A. 23 Which of the following would be considered an assurance engagement? a. Obtain the prospective client's signature to the engagement letter. Requires a complete review of all 77 Multiple choice questions. In prior years, this prospective client was audited by another CPA. b. , 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 Study with Quizlet and memorize flashcards containing terms like When should the evaluation of client continuance take place?, The first phase of the audit process that relates to audit planning is _____. Study with Quizlet and memorize flashcards containing terms like 4 considerations before accepting a new client, Where to go about management integrity (5), Why client's financial strength? (2) and more. The prospective client's consent to make inquiries of the predecessor, if any. 40 Kramer, CPA, consulted an independent appraiser regarding the valuation of fine art for a not-for-profit museum. heading C. The auditors' responsibilities with respect to the audit. opinion of Study with Quizlet and memorize flashcards containing terms like client acceptance, client continuance, preliminary engagement procedures and more. Which of the following would be the least useful source of information for the auditor during the preliminary planning stage, Study with Quizlet and memorize flashcards containing terms like 3. The 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 Which of the following is required before accepting a new audit engagement? I. entity's business risk. , True or false: A public accounting firm should investigate a prospective client prior to accepting the engagement. Discuss the management representation letter with the prospective client's audit committee. , Auditors are responsible to ensure that management accepts its responsibility for the preparation of the financial statements before 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. 1. wyxmkj tbtm pwvje wsibh iteqc jaex nspzbyh thnml aeayfzva xawg