Which of the following conditions most likely would pose the greatest risk in accepting a new integrated audit engagement? Staff will need to be rescheduled to cover this new client. There will be a client-imposed scope limitation. The firm will have to hire a specialist in one audit area.
Which of the following factors most likely would cause an auditor to decline a new audit engagement group of answer choices?
6. Which of the following factors most likely would cause an auditor to decline a new audit engagement? Failure of management to satisfy the preconditions of the audit.
Which of the following factors most likely would cause an auditor to question the integrity of management?
Failure of management to disclose material fraud to the auditor would cause the auditor to question-management’s integrity and perhaps even to withdraw from the engagement.
What is the risk of material misstatement?
Risk of material misstatement is defined as ‘the risk that the financial statements are materially misstated prior to audit.
How do you identify the risk of material misstatement?
Having obtained and documented an understanding of the entity including its internal control, the auditor is now in a position to identify and assess the risks of material misstatement, which should be done at the financial statement level, and at the assertion level for classes of transactions, account balances and …
Which of the following best describes the primary purpose of audit procedures?
To detect errors or fraud.
When a client makes extensive use of information technology the auditor should consider?
When a client makes extensive use of information technology, the auditor should consider the effect this may have on internal control.
What is an auditor’s primary method to corroborate information on litigation claims and assessments?
An attorney’s letter is the primary method used to corroborate information on litigation, claims, and assessments.
Which of the following are examples of qualitative considerations that may cause misstatements of quantitatively immaterial amounts to be considered material?
The client’s compliance with contractual requirements of operating agreements is an example of a qualitative factor that may cause misstatements of quantitatively immaterial amounts to be considered material. whether it is sufficient and appropriate.
Which of the following steps should an auditor perform first to determine the existence of related parties?
Which of the following steps should an auditor perform first to determine the existence of related parties? Inquire about the existence of related parties from management.
What are the three components of audit risk?
From an auditor’s viewpoint, the three components of audit risk are inherent risk, control risk and detection risk.
How do you identify audit risks?
4 tips to identify audit client risks
- Don’t be afraid to ask questions. …
- Know your client’s industry and their transaction cycles. …
- Identify your client’s controls. …
- Evaluate the design and implementation of your client’s controls. …
- Tracy Harding, CPA, Principal, BerryDunn.
What is material misstatement examples?
For example, a material misstatement of revenue could trigger a decision to buy a company’s stock, causing losses for the investor when the misstatement is later corrected and the price of the stock declines.