Before accepting an engagement to audit a new client quiz answers. Study with Quizlet and memorize flashcards containing terms like Risk management activities are undertaken _____. an assessment of fraud risk factors likely to cause material misstatements. Inquiring from predecessor auditor. Which of the following is a risk factor for misappropriation of assets? a) Generous performance-based compensation systems. Preparing an engagement letter. 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. had considered <p>Hi. C Review available financial information. 26. 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. 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. 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. 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. ]. , 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. - 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. F. Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding: a. review the predecessor's audit documentation if the audit is to be in accordance with GAAS. The engagement letter will be sent before the audit. D Assess the size of the client. The client's probability of achieving an unqualified opinion. 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. C)a preliminary understanding of the prospective client's control environment. Substantive audit procedures are audit procedures designed to obtain an understanding of the entity and its environment. , The term predecessor auditor refers to the public accounting firm that _____. There are many ways an auditor can accumulate evidence to meet the overall audit objectives. The client's financial reporting system has been in place for 10 years. 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. Advise the client to inform its audit committee of the possible misstatement. not accept the appointment, where it is known that a limitation will be placed on the scope of the audit. “Instinct plays a role,” said Kirisits, who also relies on the checklist for client engagement and continuance issued by Practitioners Publishing Company (PPC). ]has the capabilities to perform the audit [. , 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. [. Awareness of the consistency in the application of GAAP between periods. Disagreements which the predecessor had with the client concerning auditing procedures and accounting principles b. 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. 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. The CPA is unable to review the predecessor auditor's working papers due to a. d. The prospective client's signature on the engagement letter. , Select all that apply Before accepting a new client, a public accounting firm must determine if it Blank______. Management fails to modify prescribed controls for changes in conditions. Pre- engagement. 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. The prospective client has fired its prior auditor. The predecessor’s evaluation of matters of continuing accounting significance c. What must an auditor determine before accepting a new audit or continuing an existing one? A Formalize the terms of the engagement. This year, Wooten Enterprises engaged a new auditor who must: a. , Risk management activities are undertaken Blank______. Multiple Choice Quiz. seek the SEC's permission to accept the engagement if Wooten is publicly owned. A. A preliminary understanding of the prospective client’s industry and business b. ) Specific inquiries of the predecessor regarding communication to management, the audit committee, and those charged with governance about operational inefficiencies . An understanding of the prospective client's industry and business. Making a preliminary estimate of materiality. 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. 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. 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. Deciding whether to accept or reject an audit engagement. , Public accounting firms are _____. , Before accepting an engagement to audit a new client, an auditor is required to A. The CPA lacks a thorough understanding of the prospective client's operations and industry. Test your understanding of the client evaluation process and the stages involved in the audit process. the prospective client's signature on the engagement letter c. We focus on the decision of the auditing firm. 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). 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. 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 prospective client refuses to let the predecessor auditor respond to communication from the successor auditor. c. reject the Before accepting an engagement to audit a new client an auditor is required to? a. </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. F Before accepting an engagement to audit a new client, an auditor is required to 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 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 b. discuss the management representation letter with the prospective client's audit committee. An understanding of the prospective client's industry and business B. C) a preliminary understanding of the prospective client's control environment. 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. Require the client to restate its financial statements before proceeding with the audit. Evaluation of all matters of continuing accounting significance M. 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. B) obtain the prospective client's signature to the engagement letter. Yes, No, No b. The CPA's lack of understanding of the prospective client's internal audit function's audit plan. 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. In this phase the objective is to establish the basis for reliance on internal controls. D)the prospective client's consent to make inquiries of the predecessor auditor. , To emphasize auditor Before accepting an engagement to audit a new client, a CPA is required to obtain A. 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. ) No, Yes, Yes, Which of the following inquiries should be made of a predecessor auditor before accepting a new client engagement? a. Consideration of Internal control. Audit planning. An understanding of the prospective client's control environment d. 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 Study with Quizlet and memorize flashcards containing terms like The audit planning process should begin with the pre-engagement activities of client _________ and continuance. Before accepting an engagement to audit a new client, a CPA is required to obtain a. 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_____. , 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. Explanation. B) the prospective client's signature on the engagement letter. 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. Which of the following factors most likely would cause a CPA to not accept a new audit engagement? A. prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. Gain insights into the structured approach to auditing critical areas. 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. attempt to communicate with the predecessor auditor before accepting the engagement. Study with Quizlet and memorize flashcards containing terms like When initiating communications with predecessor auditors, prospective auditors should expect: A. An assessment of fraud risk factors likely to cause material misstatements. A preliminary understanding of the prospective client's control environment. ) Yes, Yes, No d. A preliminary understanding of the prospective client's industry and business b. 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. 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. She also meets with them in person. To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits. 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 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. an understanding of the prospective client's industry and business. A confirmation letter attached to the constructive services letter. 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. This quiz covers essential elements like client acceptance, audit planning, and the importance of the engagement letter. Relevant to ACCA Qualification Paper P7 The syllabus for Paper P7, Advanced Audit and Assurance includes Professional Appointments (syllabus reference C4). The firm will have to hire a specialist in one audit area. obtain the prospective client's signature to the engagement letter c. ) No, No, Yes c. , 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. Explore quizzes and practice tests created by teachers and students or create one from your course material. Disagreement which the predecessor had with the client concerning auditing procedures and accounting principles c. B. A client representation letter. 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. Before accepting an engagement to audit a new client, a CPA is required to obtain: Multiple Choice. - make inquiries of the predecessor auditor after obtaining the consent of the prospective client. The prospective client's signature to the engagement letter C. 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. accepting an engagement to audit a new client, a CPA is D) Management fails to modify prescribed controls for changes in conditions. 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. B Look at prior audit reports. 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. 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 ______. In this process is the development of the overall strategy. Before accepting an engagement to audit a new client, a CPA is required to obtain A. a preliminary Feb 12, 2020 · Before accepting audit clients, she researches information about their board members and obtains references for them. The prospective client's signature to the engagement letter c. 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. 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. b. B)the prospective client's signature on the engagement letter. an understanding of the prospective client's industry and business b. An engagement letter. Engagement letters . C. , Auditors are responsible to ensure that management accepts its responsibility for the preparation of the financial statements before accepting an audit engagement 6. 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. 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. Question. The client's standing in the business community. Multiple choice question. There will be a client-imposed scope limitation. 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_____. D. The client's relations with its previous CPA firm. the prospective client's signature to a written engagement letter. In this process the auditor is require to decide about not accepting a new client or continue the relationship to the existing one. 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. 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 client's financial ability. The prospective client’s signature to the engagement letter c. Before accepting an engagement to audit a new client, an auditor is required to: a. The prospective client's signature to a written engagement letter. Difficulty: Easy Source: AICPA. Study with Quizlet and memorize flashcards containing terms like 11. 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. make inquiries of the predecessor auditor after obtaining the consent of the prospective client. 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. and more. 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. kujsi roxwxbj joweus fhwd rtph nblvi wvkukdm ckrga kvzfb cjhqs