Which of the following most likely would cause an auditor to decline a new audit engagement?

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Which of the following factors most likely would cause an auditor to decline a new audit engagement? Failure of management to satisfy the preconditions for an audit.

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When should an auditor reject engagement?

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 circumstances most likely would cause an auditor to believe that material misstatement exists in an entity’s financial statement?

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.

Which of the following statements would most likely appear in an auditor’s engagement letter?

An auditor’s engagement letter most likely will include: Management’s acknowledgment of its responsibility for maintaining effective internal control.

Which of the following is least likely to be performed by an IS auditor when conducting an IS audit engagement?

Obtaining confirmation of cash balances is least likely to be performed as a part of obtaining an understanding during an audit engagement of a new audit client previously audited by another CPA.

Why an auditor might not accept an audit engagement?

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.

Which of the following actions may be appropriate if the auditor is unable to agree to a change of the engagement?

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, …

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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 consider whether a material misstatement exists? Transactions selected for testing are not supported by proper documentation.

What inherent risk factors should an auditor consider when auditing the revenue process of a computer manufacturer?

In the case of a computer manufacturer, there are two risk factors an auditor should consider while auditing the revenue process: industry-related factors and technological change.

What are the types of audit risk?

There are three common types of audit risks, which are detection risks, control risks and inherent risks.

Which of the following factors would most likely cause an auditor not to accept?

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.

Which condition or event would most likely would cause an auditor to have substantial doubt about an entity’s ability to continue as a going concern?

Substantial doubt about an entity’s ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or …

Which of one of the following that an auditor may also wish to include in the audit engagement letter?

The auditor may also wish to include the following in the letter: • Arrangements regarding the planning and performance of the audit. … Description of any other letters or reports the auditor expects to issue to the client. • Basis on which fees are computed and any billing arrangements.

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Which of the following least likely affect the form and content of overall audit plan?

The nature and timing of reports or other communication with the entity that are expected under the engagement. 6. Which of the following least likely affect the form and content of the overall audit plan? … The size of the entity.

Which of the following activities should be performed by the auditor at the beginning of the current audit engagement?

5. The auditor shall perform the following activities at the beginning of the current audit engagement: Performing procedures required by ISA 220, “Quality Control for Audits of Historical Financial Information,” regarding the continuance of the client relationship and the specific audit engagement.

Which of the following is least likely to impair a CPA firm’s independence with respect to an audit client in the Oklahoma City office of a national CPA firm?

A small CPA firm provides audit services to a large local company. Almost eighty percent of the CPA firm’s revenues come from this client. Which statement is most likely to be true? A.