Before accepting an engagement to audit a new client quiz answers. competence and objectivity Study with Quizlet and memorize flashcards containing terms like Select all that apply Factors that should be considered when determining the staffing requirements for an audit include ______. It specifies the nature of the contract between the audit firm and the client and minimises the risk of any misunderstanding of the auditor's role. To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits. prepare a memorandum setting forth the staffing requirements and documenting the preliminary client to make an inquiry of the predecessor auditor prior to final acceptance of the engagement. A preliminary understanding of the prospective client's control environment. Before accepting an engagement to audit a new client, an auditor is required to: a. accepting an engagement to audit a new client, a CPA is D) Management fails to modify prescribed controls for changes in conditions. B) obtain the prospective client's signature to the engagement letter. B. Management has a reputation for consulting with several accounting firms about significant accounting issues, Before accepting an engagement to audit a new client, a CPA is required to obtain: a. D Assess the size of the client. discuss the management representation letter with the prospective client's audit committee. an assessment of fraud risk factors likely to cause material misstatements. Which of the following factors most likely would cause an independent auditor to decide not to accept a new audit engagement? The auditor's lack of understanding of the prospective client’s internal audit function’s audit plan. Before accepting an engagement to audit a new client, a CPA is required to obtain A. Before accepting an engagement to audit a new client, a CPA is required to obtain; a. In this phase the objective is to establish the basis for reliance on internal controls. 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 When initiating communications with predecessor auditors, prospective auditors should expect: A. There will be a client-imposed scope limitation. Audit planning. Before accepting an engagement to audit a new client, a CPA is required to obtain: Multiple Choice. The client's financial reporting system has been in place for 10 years. Require the client to restate its financial statements before proceeding with the audit. C. Before accepting an engagement to audit a new client, a CPA is required to obtain a. Management fails to modify prescribed controls for changes in conditions. </p><p> </p><p>Note: Successor auditor can only inquires to predecessor if the Quiz yourself with questions and answers for Auditing Standards Quiz Answers, so you can be ready for test day. [. 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. Test your understanding of the client evaluation process and the stages involved in the audit process. This quiz covers essential elements like client acceptance, audit planning, and the importance of the engagement letter. b. The prospective client's signature to the engagement letter c. The prospective client’s signature to the engagement letter c. ) Specific inquiries of the predecessor regarding communication to management, the audit committee, and those charged with governance about operational inefficiencies . 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. 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. This year, Wooten Enterprises engaged a new auditor who must: a. Which of the following factors most likely would cause a CPA to not accept a new audit engagement? A. She also meets with them in person. make inquiries of the predecessor auditor after obtaining the consent of the prospective client b. , Before accepting an engagement to audit a new client that has previously been audited by another CPA firm, a CPA is required to obtain a. seek the SEC's permission to accept the engagement if Wooten is publicly owned. Making a preliminary estimate of materiality. not accept the appointment, where it is known that a limitation will be placed on the scope of the audit. , 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. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the:, In assessing whether to accept a client for an audit engagement, a CPA should Study with Quizlet and memorize flashcards containing terms like Considered before accepting new client, Three Preliminary engagement activities, Determine the Audit Engagement Team Requirements (factors) and more. A representation letter from the prospective client Ask the client to arrange a meeting of the predecessor auditor, management, and the successor auditor to discuss the matter. A client representation letter. D. , Public accounting firms are _____. Opinion of any susequent events occuring Study with Quizlet and memorize flashcards containing terms like Before accepting a new client, a public accounting firm must determine if it, True or false: An auditor obtains an understanding of the client and its environment to identify audit risks that may result in material misstatements. Relevant to ACCA Qualification Paper P7 The syllabus for Paper P7, Advanced Audit and Assurance includes Professional Appointments (syllabus reference C4). Preparing an engagement letter. The engagement letter will be sent before the audit. 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. an understanding of the prospective client's industry and business b. had considered <p>Hi. Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding: a. Client acceptance/retention decisions are critical due to 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 R. The prospective client refuses to let the predecessor auditor respond to communication from the successor auditor. ) Yes, Yes, No d. Consideration of Internal control. Before accepting an engagement to audit a new client, an auditor is required to: - discuss the management representation letter with the prospective client's audit committee. attempt to communicate with the predecessor auditor before accepting the engagement. The client's financial ability. B) the prospective client's signature on the engagement letter. 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. audit fees to be charged special expertise needed level of risk client industry, True or false: The extent of effort that goes into evaluating a new client is normally much less than the decision to D) Management fails to modify prescribed controls for changes in conditions. , When auditing a company with multiple locations, the amount of audit attention devoted to various Quiz yourself with questions and answers for Becker, RC, Quiz ; ch 1/2, so you can be ready for test day. A. “Instinct plays a role,” said Kirisits, who also relies on the checklist for client engagement and continuance issued by Practitioners Publishing Company (PPC). obtain the prospective client's signature to the engagement letter. c. b) Management preoccupation with Study with Quizlet and memorize flashcards containing terms like An inadequate understanding of the entity's internal control would most likely cause an auditor to decline a new audit engagement. F. The prospective client's signature on the engagement letter. Study with Quizlet and memorize flashcards containing terms like Risk management activities are undertaken _____. The predecessor’s evaluation of matters of continuing accounting significance c. Deciding whether to accept or reject an audit engagement. The client's standing in the business community. The CPA is unable to review the predecessor auditor's working papers due to a. TRUE FALSE, Client-imposed 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. An understanding of the prospective client's control environment d. Substantive audit procedures are audit procedures designed to obtain an understanding of the entity and its environment. prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. review the predecessor's audit documentation if the audit is to be in accordance with GAAS. In this process the auditor is require to decide about not accepting a new client or continue the relationship to the existing one. , Before accepting an engagement to audit a new client, an auditor is required to A. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to obtain: An assessment of fraud risk factors likely to cause material misstatements. prepare a memorandum setting forth the staffing Study with Quizlet and memorize flashcards containing terms like The audit planning process should begin with the pre-engagement activities of client _________ and continuance. Yes, No, No b. , To emphasize auditor Before accepting an engagement to audit a new client, a CPA is required to obtain A. d. Sep 14, 2022 · An audit engagement is a contract between a client and a third-party auditor to audit some aspect of the client's business, such as accounting records, financial statements, internal controls, regulatory compliance, information systems, operational processes, and so on. We focus on the decision of the auditing firm. the prospective client's signature on the engagement letter c. 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. Which of the following is a risk factor for misappropriation of assets? a) Generous performance-based compensation systems. Advise the client to inform its audit committee of the possible misstatement. preliminary engagement activities client acceptance and continuance planning the audit, Select all that apply Before accepting a new client, a public accounting firm must determine if it Blank_____. reject the Before accepting an engagement to audit a new client an auditor is required to? a. Except as permitted by the Rules of the Code of Professional Conduct, an auditor is precluded from disclosing confidential information ob-tained in the course of an engagement unless the client specifically consents. TRUE FALSE, Before accepting an engagement to audit a new client, an auditor is required to discuss the management representation letter with the client's audit committee. at the conclusion of the audit engagement before issuing the audit report before beginning any audit engagement only during the audit Which of the following factors most likely would cause a CPA to not accept a new audit engagement? The prospective client is unwilling to make all Financial records available to the CPA An auditor compared the current year gross margin with the prior-year gross margin to determine if cost of sales is reasonable. There are many ways an auditor can accumulate evidence to meet the overall audit objectives. A preliminary understanding of the prospective client's industry and business b. The prospective client's signature to the engagement letter C. C Review available financial information. 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 existing client, or agreeing the terms of any new 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. Evaluation of all matters of continuing accounting significance M. What must an auditor determine before accepting a new audit or continuing an existing one? A Formalize the terms of the engagement. , Auditors are responsible to ensure that management accepts its responsibility for the preparation of the financial statements before accepting an audit engagement 6. ]has the capabilities to perform the audit [. A confirmation letter attached to the constructive services letter. An engagement letter. the prospective client's consent to Relevant to ACCA Qualification Paper P7 The syllabus for Paper P7, Advanced Audit and Assurance includes Professional Appointments (syllabus reference C4). , The term predecessor auditor refers to the public accounting firm that _____. 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. Gain insights into the structured approach to auditing critical areas. Engagement letters . obtain the prospective client's signature to the engagement letter c. Inquiring from predecessor auditor. Multiple Choice Quiz. 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. The prospective client has fired its prior auditor. Disagreements which the predecessor had with the client concerning auditing procedures and accounting principles b. An understanding of the prospective client's industry and business. 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 existing client, or agreeing the terms of any new a. ) No, Yes, Yes, Which of the following inquiries should be made of a predecessor auditor before accepting a new client engagement? a. Awareness of the consistency in the application of GAAP between periods. A preliminary understanding of the prospective client’s industry and Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to:, Which of the following procedures would a CPA most likely perform in the planning phase of a financial statement audit?, Which of the following matters does an auditor usually include in the engagement letter? and more. D)the prospective client's consent to make inquiries of the predecessor auditor. An understanding of the prospective client's industry and business B. In this process is the development of the overall strategy. Disagreement which the predecessor had with the client concerning auditing procedures and accounting principles c. The firm will have to hire a specialist in one audit area. Before accepting an engagement you must inquire to predecessor auditor about the following:</p><p>(1) Reason/s for a change of auditor</p><p>(2) About Integrity of the prospective client</p><p>(3) Disagreements encountered by predecessor with the client about auditing procedures and accounting policies. Pre- engagement. TRUE FALSE, Client-imposed Before accepting an engagement to audit a new client, an auditor is required to: make inquiries of the predecessor auditor after obtaining the consent of the prospective client. The prospective client's signature to a written engagement letter. a preliminary Feb 12, 2020 · Before accepting audit clients, she researches information about their board members and obtains references for them. C)a preliminary understanding of the prospective client's control environment. Explore quizzes and practice tests created by teachers and students or create one from your course material. an understanding of the prospective client's industry and business. Ordinarily, the predecessor auditor permits the auditor to review the predecessor's audit documentation relating to A memorandum to be placed in the permanent section of the auditing working papers. Study with Quizlet and memorize flashcards containing terms like An inadequate understanding of the entity's internal control would most likely cause an auditor to decline a new audit engagement. - obtain the prospective client's signature to the engagement letter 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. , 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. , Risk management activities are undertaken Blank______. ) No, No, Yes c. The CPA's lack of understanding of the prospective client's internal audit function's audit plan. B Look at prior audit reports. The predecessor's evaluation of matters of continuing accounting significance b. ]. To conduct interviews with the partner and manager in charge of the predecessor public accounting firm's Study with Quizlet and memorize flashcards containing terms like The following are considered by a CPA firm in deciding whether to accept a new client, except: A. - make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Evaluating compliance with ethical requirements, including 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 prospective client. The client's relations with its previous CPA firm. An assessment of fraud risk factors likely to cause material misstatements. The client's probability of achieving an unqualified opinion. 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 obtain the prospective client's signature to the engagement letter 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. make inquiries of the predecessor auditor after obtaining the consent of the prospective client. and more. B)the prospective client's signature on the engagement letter. A preliminary understanding of the prospective client’s industry and business b. F Before accepting an engagement to audit a new client, an auditor is required to a. Explanation. 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 11. 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's consent to Study with Quizlet and memorize flashcards containing terms like The first phase of the audit process that relates to audit planning is Blank_____. the prospective client's signature to a written engagement letter. Multiple choice question. , Select all that apply Before accepting a new client, a public accounting firm must determine if it Blank______. The CPA lacks a thorough understanding of the prospective client's operations and industry. 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. C) a preliminary understanding of the prospective client's control environment. The auditors are planning an audit engagement for a new client in a business that is unfamiliar to 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. 26. Question. Difficulty: Easy Source: AICPA. psle wnoyvt ivfa nqrbl blm kuoi xlroy neknpqyj cuosua mfaqi