Arrangements concerning which of the following are least likely to be included in engagement letter? a. Internal auditors b. Predecessor auditor c. Stockholders d. Appraisers

Arrangements concerning which of the
following are least likely to be included in
engagement letter?
a. Internal auditors
b. Predecessor auditor
c. Stockholders
d. Appraisers
by

1 Answer

Answer :

Stockholders
by

Related questions

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

When a CPA is approached to perform an audit for the first time, the CPA should make inquiries of the predecessor auditor. This is a necessary procedure because the predecessor may be able to provide the successor with information that will assist the successor in determining a. Whether, in the predecessor's opinion, internal control of the company has been satisfactory. b. Whether the engagement should be accepted. c. Whether the predecessor's work should be utilized. d. Whether the company follows the policy of rotating its auditors.

Description : When a CPA is approached to perform an audit for the first time, the CPA should make inquiries of the predecessor auditor. This is a necessary procedure because the predecessor may be able to provide ... 's work should be utilized. d. Whether the company follows the policy of rotating its auditors.

Last Answer : Whether the engagement should be accepted.

A CPA is conducting the first audit of a client’s financial statements. The CPA hopes to reduce the audit work by consulting with the predecessor auditor and reviewing the predecessor's working papers. This procedure is a. Acceptable if the CPA refers in the audit report to reliance upon the predecessor auditor's work. b. Required if the CPA is to render an unqualified opinion. c. Unacceptable because the CPA should bring an independent viewpoint to a new engagement. d. Acceptable if the client and the predecessor auditor agree to it.

Description : A CPA is conducting the first audit of a client's financial statements. The CPA hopes to reduce the audit work by consulting with the predecessor auditor and reviewing the predecessor's working papers. ... to a new engagement. d. Acceptable if the client and the predecessor auditor agree to it.

Last Answer : Acceptable if the client and the predecessor auditor agree to it.

Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's a. Evaluation of all matters of continuing accounting significance. b. Understanding as to the reasons for the change of auditors. c. Awareness of the consistency in the application of GAAP between periods. d. Opinion of any subsequent events occurring since the predecessor's audit report was issued

Description : Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's a. Evaluation of all matters of continuing accounting ... . Opinion of any subsequent events occurring since the predecessor's audit report was issued

Last Answer : Understanding as to the reasons for the change of auditors

.A written understanding between the auditor and the client concerning the auditor's responsibility for the discovery of illegal acts is usually set forth in a(an) a. Letter of audit inquiry. b. Client representation letter. c. Management letter. d. Engagement letter

Description : .A written understanding between the auditor and the client concerning the auditor's responsibility for the discovery of illegal acts is usually set forth in a(an) a. Letter of audit inquiry. b. Client representation letter. c. Management letter. d. Engagement letter

Last Answer : Engagement letter

Which of the following best describes why publicly-traded corporations follow the practice of having the outside auditor appointed by the board of directors or elected by the stockholders? a. To comply with the regulations of the Accounting Standards Council. b. To emphasize auditor independence from the management of the corporation. c. To encourage a policy of rotation of the independent auditors. d. To provide the corporate owners with an opportunity to voice their opinion concerning the quality of the auditing firm selected by the director

Description : Which of the following best describes why publicly-traded corporations follow the practice of having the outside auditor appointed by the board of directors or elected by the stockholders? a. ... opportunity to voice their opinion concerning the quality of the auditing firm selected by the director

Last Answer : To emphasize auditor independence from the management of the corporation

Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding a. Disagreements the predecessor had with the client concerning auditing procedures and accounting principles. b. The predecessor’s evaluation of matters of continuing accounting significance. c. The degree of cooperation the predecessor received concerning the inquiry of the client’s lawyer. d. The predecessor’s assessments of inherent risk and judgments about materiality

Description : Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding a. Disagreements the predecessor had with the client concerning auditing ... lawyer. d. The predecessor's assessments of inherent risk and judgments about materiality

Last Answer : Disagreements the predecessor had with the client concerning auditing procedures and accounting principles.

Inquiries directed towards those charged with governance may most likely a. Relate to their activities concerning the design, and effectiveness of the entity's internal control and whether management has satisfactorily responded to any findings from these activities. b. Help the auditor understand the environment in which the financial statements are prepared. c. Relate to changes in the entity's marketing strategies, sales trends, or contractual arrangements with its customers. d. Help the auditor in evaluating the appropriateness of the selection and application of certain accounting policies

Description : Inquiries directed towards those charged with governance may most likely a. Relate to their activities concerning the design, and effectiveness of the entity's internal control and ... the auditor in evaluating the appropriateness of the selection and application of certain accounting policies

Last Answer : Help the auditor understand the environment in which the financial statements are prepared.

An initial (first-time) audit requires more audit time to complete than a recurring audit. One of the reasons for this is that a. New auditors are usually assigned to an initial audit. b. A larger proportion of customer accounts receivable need to be confirmed on an initial audit. c. The client's business, industry, and internal control are unfamiliar to the auditor and need to be carefully studied. d. Predecessor auditors need to be consulted.

Description : An initial (first-time) audit requires more audit time to complete than a recurring audit. One of the reasons for this is that a. New auditors are usually assigned to an initial audit. b. A ... unfamiliar to the auditor and need to be carefully studied. d. Predecessor auditors need to be consulted.

Last Answer : The client's business, industry, and internal control are unfamiliar to the auditor and need to be carefully studied

Which of the following factors most likely would cause a CPA to decline a new audit engagement? a. The CPA does not understand the entity's operations and industry. b. The CPA is unable to review the predecessor auditor's working papers. c. Management is unwilling to permit inquiry of its legal counsel. d. Management acknowledges that the entity has had recurring operating losses

Description : Which of the following factors most likely would cause a CPA to decline a new audit engagement? a. The CPA does not understand the entity's operations and industry. b. The CPA is ... permit inquiry of its legal counsel. d. Management acknowledges that the entity has had recurring operating losses

Last Answer : Management is unwilling to permit inquiry of its legal counsel

Which of the following matters would an auditor most likely consider when establishing the scope of the audit?a. Audit areas where there is a higher risk of material misstatement. b. The expected audit coverage, including the number and locations of the entity's components to be included. c. The entity's timetable for reporting, such as at interim and final stages. d. The discussion with the entity's management concerning the expected communications on the status of audit work throughout the engagement and the expected deliverables resulting from the audit procedures.

Description : Which of the following matters would an auditor most likely consider when establishing the scope of the audit? a. Audit areas where there is a higher risk of material misstatement. ... status of audit work throughout the engagement and the expected deliverables resulting from the audit procedures.

Last Answer : The expected audit coverage, including the number and locations of the entity's components to be included.

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. The prospective client’s signature to the engagement letter. c. A preliminary understanding of the prospective client’s control environment. d. The prospective client’s consent to make inquiries of the predecessor auditor, if any.

Description : 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. The prospective client's signature to ... . d. The prospective client's consent to make inquiries of the predecessor auditor, if any.

Last Answer : The prospective client’s consent to make inquiries of the predecessor auditor, if any.

Which of the following matters is generally included in an auditor’s engagement letter? a. Management’s responsibility for the entity’s compliance with laws and regulationsb. The factors to be considered in settingpreliminary judgments about materiality. c. Management’s vicarious liability forillegal acts committed by its employees. d. The auditor’s responsibility to search forsignificant internal control deficiencies

Description : Which of the following matters is generally included in an auditor's engagement letter? a. Management's responsibility for the entity's compliance with laws and regulationsb. The factors to ... its employees. d. The auditor's responsibility to search for significant internal control deficiencies

Last Answer : Management’s responsibility for the entity’s compliance with laws and regulations

Which of the following statements would least likely appear in an auditor's engagement letter? a. Our engagement is subject to the risk that material errors, fraud, and defalcations, if they exist, will not be detected. b. During the course of our audit we may observe opportunities for economy in, or improved controls over, your operations. c. After performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagement. d. Fees for our services are based on our regular per diem rates, plus travel and other out-of-pocket expenses

Description : Which of the following statements would least likely appear in an auditor's engagement letter? a. Our engagement is subject to the risk that material errors, fraud, and defalcations, if they exist, ... services are based on our regular per diem rates, plus travel and other out-of-pocket expenses

Last Answer : After performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagement.

A successor auditor most likely would make specific inquiries of the predecessor auditor regarding a. Specialized accounting principles of the client's industry. b. Disagreements with management as to auditing procedures. c. The competency of the client's internal audit staff. d. The uncertainty inherent in applying sampling procedures.

Description : A successor auditor most likely would make specific inquiries of the predecessor auditor regarding a. Specialized accounting principles of the client's industry. b. Disagreements with management as to ... the client's internal audit staff. d. The uncertainty inherent in applying sampling procedures.

Last Answer : Disagreements with management as to auditing procedures

An engagement letter should be written before the start of an audit because a. It specifies the client's responsibility for preparing schedules and making the records available to the auditor. b. It may limit the auditor's legal liability by specifying the auditor's responsibilities. c. It specifies the basis for billing the audit for the upcoming year. d. All of the above

Description : An engagement letter should be written before the start of an audit because a. It specifies the client's responsibility for preparing schedules and making the records available to the auditor. b. It may ... It specifies the basis for billing the audit for the upcoming year. d. All of the above

Last Answer : All of the above

One of the primary roles of an audit program is to a. Provide for a standardized approach to the audit engagement. b. Serve as a tool for planning, directing, and controlling audit work. c. Document an auditor's understanding of the internal control. d. Delineate the audit risk accepted by the auditor

Description : One of the primary roles of an audit program is to a. Provide for a standardized approach to the audit engagement. b. Serve as a tool for planning, directing, and controlling audit work. c ... an auditor's understanding of the internal control. d. Delineate the audit risk accepted by the auditor

Last Answer : Serve as a tool for planning, directing, and controlling audit work

Which of the following is least likely included in an auditor’s inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? a. Are financial reporting operations controlled by and limited to one location? b. Does it have knowledge of fraud or suspect fraud? c. Does it have programs to mitigate fraud risks? d. Has it reported to the audit committee the nature of the company's internal control?

Description : Which of the following is least likely included in an auditor's inquiry of management while obtaining information to identify the risks of material misstatement due to fraud? a. Are financial reporting ... d. Has it reported to the audit committee the nature of the company's internal control?

Last Answer : Are financial reporting operations controlled by and limited to one location?

What will an auditor who has been proposed for an audit engagement usually do prior to accepting a new client? a. Draft the financial statements of the client as a measure of goodwilb. With the permission from the prospective client, contact the predecessor auditor to determine if there are any disagreements between the client and the audit firms. c. Obtain the potential client's permission to talk to the former auditor and review work papers. d. Perform a peer review on the potential client in accordance with professional standardsl

Description : What will an auditor who has been proposed for an audit engagement usually do prior to accepting a new client? a. Draft the financial statements of the client as a measure of goodwill b ... review work papers. d. Perform a peer review on the potential client in accordance with professional standards

Last Answer : With the permission from the prospective client, contact the predecessor auditor to determine if there are any disagreements between the client and the audit firms

When an independent auditor is approached to perform an audit for the first time, he/she should make inquiries of the predecessor auditor. Inquiries are necessary because the predecessor may be able to provide the successor with information that will assist the successor in determining whether a. A certain amount of audit fee will be acceptable to the client. b. An unqualified opinion may be issued. c. The audit documentation by the predecessor auditor can be utilized. d. The engagement proposal should be accepted

Description : When an independent auditor is approached to perform an audit for the first time, he/she should make inquiries of the predecessor auditor. Inquiries are necessary because the predecessor may ... documentation by the predecessor auditor can be utilized. d. The engagement proposal should be accepted

Last Answer : The engagement proposal should be accepted

.Which of the following fee arrangements is in violation of the Code of Professional Conduct? a. A fee based on whether the CPA's report on the client's financial statements results in the approval of a bank loan. b. A fee based on the outcome of a bankruptcy proceeding. c. A fee based on the nature of the service rendered and the CPA's particulaexpertise instead of the actual time spent on the engagement. d. A fee based on the fee charged by the prior auditor.r

Description : .Which of the following fee arrangements is in violation of the Code of Professional Conduct? a. A fee based on whether the CPA's report on the client's financial statements results in the approval of a ... actual time spent on the engagement. d. A fee based on the fee charged by the prior auditor.

Last Answer : A fee based on whether the CPA's report on the client's financial statements results in the approval of a bank loan

Internal auditing is an independent appraisal function established within an organization to examine and evaluate its activities. To that end, internal auditing provides assistance to a. External auditors b. Stockholders c. Management and the board of directors d. Government

Description : Internal auditing is an independent appraisal function established within an organization to examine and evaluate its activities. To that end, internal auditing provides assistance to a. External auditors b. Stockholders c. Management and the board of directors d. Government

Last Answer : Management and the board of directors

Which of the following factors would most likely 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 auditor’s computer-assisted audit techniques. b. Management’s disregard of its responsibility to maintain an adequate internal control environment. c. The CPA’s inability to determine whether related-party transactions were consummated on terms equivalent to arm’s-length transactions. d. Management’s refusal to permit the CPA to perform substantive tests before the year-end.

Description : Which of the following factors would most likely 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 auditor's ... . d. Management's refusal to permit the CPA to perform substantive tests before the year-end.

Last Answer : Management’s disregard of its responsibility to maintain an adequate internal control environment

The most likely explanation why the auditor’s examination cannot reasonably be expected to bring all illegal acts by the client to the auditor’s attention is that a. Illegal acts are perpetrated by management override of internal control. b. Illegal acts by clients often relate to operating aspects rather than accounting aspects. c. The client’s internal control may be so strong that the auditor performs only minimal substantive testing. d. Illegal acts may be perpetrated by the only person in the client’s organization

Description : The most likely explanation why the auditor's examination cannot reasonably be expected to bring all illegal acts by the client to the auditor's attention is that a. Illegal acts are perpetrated by ... testing. d. Illegal acts may be perpetrated by the only person in the client's organization

Last Answer : Illegal acts by clients often relate to operating aspects rather than accounting aspects

In assessing the technical competence of an internal auditor, an external auditor most likely would obtain information about the a. Organizational level to which the internal auditor reports. b. Quality of working paper documentation, reports, and recommendations. c. Influence of management on the internal auditor's duties. d. Entity's commitment to integrity and ethical values.

Description : In assessing the technical competence of an internal auditor, an external auditor most likely would obtain information about the a. Organizational level to which the internal auditor reports. b. Quality of ... on the internal auditor's duties. d. Entity's commitment to integrity and ethical values.

Last Answer : Quality of working paper documentation, reports, and recommendations

In determining whether the work of the internal auditors is likely to be adequate for purposes of the audit, the external auditor shall evaluate the internal auditor's a. Efficiency and experience b. Competence and objectivity c. Independence and review skills d. Training and supervisory skills

Description : In determining whether the work of the internal auditors is likely to be adequate for purposes of the audit, the external auditor shall evaluate the internal auditor's a. Efficiency and experience b. Competence and objectivity c. Independence and review skills d. Training and supervisory skills

Last Answer : Competence and objectivity

Which of the following will an auditor least likely discuss with the former auditors of a potential client prior to acceptance? a. Disagreements with management regarding accounting principles b. Integrity of management c. Fees charged for services d. Reasons for changing audit firms

Description : Which of the following will an auditor least likely discuss with the former auditors of a potential client prior to acceptance? a. Disagreements with management regarding accounting principles b. Integrity of management c. Fees charged for services d. Reasons for changing audit firms

Last Answer : Fees charged for services

Which of the following will an auditor least likely discuss with the former auditors of a potential client prior to acceptance? a. Disagreements with management regarding accounting principles b. Integrity of management c. Fees charged for services d. Reasons for changing audit firms

Description : Which of the following will an auditor least likely discuss with the former auditors of a potential client prior to acceptance? a. Disagreements with management regarding accounting principles b. Integrity of management c. Fees charged for services d. Reasons for changing audit firms

Last Answer : Fees charged for services

Which of the following is not a document or record that should be examined early in the engagement? a. Corporate charter and by-laws. b. Contracts. c. Management letter. d. Minutes of board of directors' and stockholders' meetings

Description : Which of the following is not a document or record that should be examined early in the engagement? a. Corporate charter and by-laws. b. Contracts. c. Management letter. d. Minutes of board of directors' and stockholders' meetings

Last Answer : Management letter

The audit program usually cannot be finalized until the a. Reportable conditions have been communicated to the audit committee of the board of directors. b. Engagement letter has been signed by the auditor and the client. c. Consideration of the entity’s internal control has been completedd. Search for unrecorded liabilities has beenperformed and documented

Description : The audit program usually cannot be finalized until the a. Reportable conditions have been communicated to the audit committee of the board of directors. b. Engagement letter has been ... s internal control has been completed d. Search for unrecorded liabilities has been performed and documented

Last Answer : Consideration of the entity’s internal control has been completed

Audit programs are modified to suit the circumstances on particular engagements. A complete audit program for an engagement generally should be developed a. Prior to beginning the actual audit work. b. After the auditor has completed an evaluation of the existing internal accounting control. c. After reviewing the client's accounting records and procedures. d. When the audit engagement letter is prepared

Description : Audit programs are modified to suit the circumstances on particular engagements. A complete audit program for an engagement generally should be developed a. Prior to beginning the actual audit work. ... the client's accounting records and procedures. d. When the audit engagement letter is prepared

Last Answer : After the auditor has completed an evaluation of the existing internal accounting contro

Which of the following statements is correct concerning the auditor's responsibility with respect to illegal acts? a. An auditor must design tests to detect both direct-effect and indirect-effect illegal acts. b. An auditor must design tests to detect both immaterial and material directeffect illegal acts. c. An auditor must design tests to obtain reasonable assurance of detecting material direct-effect illegal acts. d. An auditor must design tests to detect both material direct-effect and material indirect-effect illegal acts

Description : Which of the following statements is correct concerning the auditor's responsibility with respect to illegal acts? a. An auditor must design tests to detect both direct-effect and indirect- ... auditor must design tests to detect both material direct-effect and material indirect-effect illegal acts

Last Answer : An auditor must design tests to obtain reasonable assurance of detecting material direct-effect illegal acts.

Which of the following is correct concerning requirements about auditor's communications about fraud? a. Fraud that involves senior management should be reported directly to the audit committee regardless of the amounts involved. b. All fraud with a material effect on the financial statements should be reported directly by the auditor to the SEC c. Fraud with a material effect on the financial statements should ordinarily be disclosed by the auditor through the use of an emphasis of a matter paragraph added to the audit report. d. The auditor has no responsibility to disclose fraud outside the entity under any circumstances

Description : Which of the following is correct concerning requirements about auditor's communications about fraud? a. Fraud that involves senior management should be reported directly to the audit committee ... . The auditor has no responsibility to disclose fraud outside the entity under any circumstances

Last Answer : Fraud that involves senior management should be reported directly to the audit committee regardless of the amounts involved

An engagement to perform agreed-upon procedures may involve the auditor in performing certain procedures concerning I. Individual items of financial data. II. A single financial statement. III. A complete set of financial statements. a. I and II only b. II and III only c. I and III only d. I, II, and III

Description : An engagement to perform agreed-upon procedures may involve the auditor in performing certain procedures concerning I. Individual items of financial data. II. A single financial statement. III. A complete set of financial statements. ... only b. II and III only c. I and III only d. I, II, and III

Last Answer : I, II, and III

Which of the following least likely limits the auditor’s ability to detect material misstatement? a. The inherent limitations of any accounting and internal control system. b. Most audit evidences are conclusive rather than being persuasive. c. Audit is based on testing d. Audit procedures that are effective in detecting ordinary misstatements are ineffective in detecting intentional misstatements

Description : Which of the following least likely limits the auditor's ability to detect material misstatement? a. The inherent limitations of any accounting and internal control system. b ... procedures that are effective in detecting ordinary misstatements are ineffective in detecting intentional misstatements

Last Answer : Most audit evidences are conclusive rather than being persuasive

The scope and nature of an auditor's contractual obligation to a client is ordinarily set forth in the a. Opinion paragraph of the auditor’s report. b. Management letter. c. Engagement letter. d. Scope paragraph of the auditor’s repor

Description : The scope and nature of an auditor's contractual obligation to a client is ordinarily set forth in the a. Opinion paragraph of the auditor’s report. b. Management letter. c. Engagement letter. d. Scope paragraph of the auditor’s repor

Last Answer : Engagement letter.

The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of a. The assessment of whether to accept the audit engagement. b. Understanding the entity's internal control structure. c. The Tests of Controls. d. The Tests of Transactions

Description : The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of a. The assessment of whether to accept the audit engagement. b. Understanding the entity's internal control structure. c. The Tests of Controls. d. The Tests of Transactions

Last Answer : Understanding the entity's internal control structure.

The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of a. The assessment of whether to accept the audit engagement. b. Understanding the entity's internal control structure. c. The Tests of Controls. d. The Tests of Transactions

Description : The auditor's evaluation of the likelihood of material employee fraud is normally done initially as a part of a. The assessment of whether to accept the audit engagement. b. Understanding the entity's internal control structure. c. The Tests of Controls. d. The Tests of Transactions

Last Answer : Understanding the entity's internal control structure

Which one of the following is an example of management expectations from the independent auditors? a. An expert providing a written communication as the product of the engagement. b. Individuals who perform day-to-day accounting functions on behalf of the company. C. AN active participant in management decision-making. d. An internal source of expertise on financial and other matters

Description : Which one of the following is an example of management expectations from the independent auditors? a. An expert providing a written communication as the product of the engagement. b. Individuals who ... in management decision-making. d. An internal source of expertise on financial and other matters

Last Answer : An expert providing a written communication as the product of the engagement

The independent auditor lends credibility to client financial statements by a. Stating in the auditor’s management letter that the examination was made in accordance with PSAs b. Attaching an auditor’s opinion to the client’s financial statements. c. Testifying under oath about client financial statements. d. Maintaining clear-cut distinctions between management representations and auditor’s representations.

Description : The independent auditor lends credibility to client financial statements by a. Stating in the auditor's management letter that the examination was made in accordance with PSAs b. ... statements. d. Maintaining clear-cut distinctions between management representations and auditor's representations.

Last Answer : Attaching an auditor’s opinion to the client’s financial statements.

Why does a company choose to have an independent auditor report on its financial statements? a. Independent auditors will always detect management fraud. b. Independent auditors guarantee the accuracy of the financial statements. c. The company preparing the statements may have a vested interest in reporting certain results. d. An independent audit is designed to search for deficiencies in the company's internal control

Description : Why does a company choose to have an independent auditor report on its financial statements? a. Independent auditors will always detect management fraud. b. Independent auditors guarantee the accuracy ... . An independent audit is designed to search for deficiencies in the company's internal control

Last Answer : The company preparing the statements may have a vested interest in reporting certain results.

Generally, the decision to notify parties outside the client's organization regarding a noncompliance with laws and regulations a. Independent auditor. b. Management. c. Outside legal counsel. d. Internal auditors.

Description : Generally, the decision to notify parties outside the client's organization regarding a noncompliance with laws and regulations a. Independent auditor. b. Management. c. Outside legal counsel. d. Internal auditors.

Last Answer : Management

If the auditor is convinced that the client has an excellent internal control structure, the amount of audit evidence to be gathered. a. Can be significantly less than where internal control is not adequate. b. Will not be affected since the auditor must arrive at an independently determined opinion. c. Must be increased to support the auditor's belief. d. Is not determinable

Description : If the auditor is convinced that the client has an excellent internal control structure, the amount of audit evidence to be gathered. a. Can be significantly less than where internal control is not ... determined opinion. c. Must be increased to support the auditor's belief. d. Is not determinable

Last Answer : Can be significantly less than where internal control is not adequate.

The external auditor should obtain a sufficient understanding of the internal audit function because a. The understanding of the internal audit function is an important substantive test to be performed by the external auditor. b. The audit programs, working papers, and reports of internal auditors may often be used as a substitute for the work of the external auditor's staff. c. The procedures performed by the internal audit staff may eliminate the external auditor's need for considering internal control. d. The work performed by internal auditors may be a factor in determining the nature, timing, and extent of the external auditor's procedures.

Description : The external auditor should obtain a sufficient understanding of the internal audit function because a. The understanding of the internal audit function is an important substantive test to be performed by ... factor in determining the nature, timing, and extent of the external auditor's procedures.

Last Answer : The work performed by internal auditors may be a factor in determining the nature, timing, and extent of the external auditor's procedures.