Which of the following factors would cause an auditor not to accept a new audit engagement * 1 point?

Which of the following factors would cause an auditor not to accept a new audit engagement?

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 of the following factors would most likely cause a CPA not to accept an audit engagement?

Which of the following factors most likely would cause a CPA to decide not to accept a new audit engagement? Management’s disregard of its responsibility to maintain an adequate internal control environment.

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What factors should an auditor consider prior to accepting an engagement?

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 …

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.

What is audit strategy document?

An audit strategy sets the direction, timing, and scope of an audit. … The strategy document usually includes a statement of the key decisions needed to properly plan the audit. The audit strategy is based on the following considerations: The scope of the engagement. The characteristics of the engagement.

Which of the following statements best describes auditors responsibility to detect errors and frauds?

Which of the following statements best describes auditors’ responsibility to detect errors and frauds? Auditors should design an audit to provide reasonable assurance of detecting errors and frauds that are material to the financial statements.

Which of the following best describes the primary purpose of audit procedures?

To detect errors or fraud.

Which of the following procedures would provide the most reliable evidence?

Which of the following procedures would provide the most reliable audit evidence? Inspection of bank statements obtained directly from the client’s financial institution. bc: When documentation is prepared solely by client personnel, its reliability is less than that prepared by the auditor or an independent party.

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Which of the following is more difficult to evaluate objectively a efficiency and effectiveness of operations?

a . Efficiency and effectiveness of operations are more difficult to evaluate objectively. Compliance with government regulations and presentation of financial statements in accordance with generally accepted accounting principles can be evaluated without being biased as they do not require much judgement.

Why must an auditor consider managements integrity prior to accepting an audit engagement?

Prior to accepting a client, the auditor should investigate the client. The primary purpose is to evaluate the integrity of the client and the possibility of management fraud. The auditor should be especially concerned with the possibility of management fraud since it is difficult to uncover.

Why would an auditor perform engagement activities?

Pre-engagement activities take place before the auditor accepts or declines an audit engagement. These activities are performed when the auditor has to decide whether to accept a new client or to continue with the relationship with an existing client.

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.

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.

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What is the scope of an audit engagement?

Audit scope, defined as the amount of time and documents which are involved in an audit, is an important factor in all auditing. The audit scope, ultimately, establishes how deeply an audit is performed. It can range from simple to complete, including all company documents.

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