Assuming independence and requisite technical abilities, the pre- acceptance evaluation of a prospective audit engagement normally focuses on three factors: 1) personal integrity of the prospective client’s management and principals, 2) presence of circumstances pointing towards unusual risks in the engagement or …
What are the factors that an auditor need to consider before accepting a company as an audit client?
Discuss the factors an auditor should consider before accepting a company as an audit client. Answer: The auditor should investigate and consider the prospective client’s standing in the business community, financial stability, management’s integrity, and relations with its bankers, attorneys, and previous CPA firm.
What factors should an auditor consider prior to accepting an engagement prior to accepting a client the auditor should ▼ discuss the company’s financial statements with its banker investigate the client review the company’s projected cash flows The auditor should evaluate the client’s ▼ credit?
Prior to accepting a client, the auditor should investigate the client. The auditor should evaluate the client’s standing in the business community, financial stability, and relations with its previous CPA firm.
Which is the 4 steps in accepting an audit engagement?
Each audit engagement is unique, but most share the basic steps of preparation, planning, field testing, and audit procedures, as well as subsequently rendering the audit opinion.
Audit engagement checklist
- Prepare & Plan. …
- Conduct fieldwork. …
- Gather evidence. …
- Report findings & file supporting documents.
What are the factors the auditor should consider when developing an engagement plan?
Internal auditors must develop and document a plan for each engagement, including the engagement’s objectives, scope, timing, and resource allocations. The plan must consider the organization’s strategies, objectives, and risks relevant to the engagement.
What are the processes to accept or continue with an audit engagement?
ensure that the legal requirements in relation to the removal of the previous auditors and the appointment of the firm have been met. carry out checks to ensure the firm can be independent, is competent to do this audit and has the necessary resources. assess whether this work is suitably low risk.
What factors should an auditor consider prior to accepting an engagement quizlet?
What factors should an auditor consider prior to accepting an engagement? The auditor should investigate the client, the clients standing in the business community, financial stability, and relations with its previous CPA firm. You want to assess integrity of the client to avoid fraud.
What are the three types of misstatements?
3 Types of Misstatement in Audit
Three types of misstatement include factual misstatement, judgmental misstatements, and projected misstatements.
Which of the following is the best example of a corroborating evidence?
c . The best example of the corroborating evidence is Purchase Orders, which are helpful in obtaining the information.
What are the 4 phases of an audit process?
Although every audit process is unique, the audit process is similar for most engagements and normally consists of four stages: Planning (sometimes called Survey or Preliminary Review), Fieldwork, Audit Report and Follow-up Review. Client involvement is critical at each stage of the audit process.
Why an auditor might decline an 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.
What are the phases stages of an audit engagement?
Audit engagements are performed in three general phases: planning, fieldwork & review, and reporting.