Which of the following is the correct order of steps in the audit process?
Perform tests of control
Develop an overall strategy for the expected conduct and scope of the audit
Obtain client’s written representation
Prepare engagement letter
Perform substantive tests
D, A, B, E, C
D, B, C, A, E
D, B, A, E,C
D, B,E, A,C
Which of the following is not is not normally performed in the preplanning or pre-engagement phase?
Deciding whether to accept or reject an audit engagement
In making a decision to accept or continue with a client, the auditor should consider:
abcd Its competence YES YES YES YES
Its own independence YES NO YES NO
Its ability to service the client properly YES YES YES NO
The integrity of the client’s
management YES YES NO YES
The purpose of having communication between the predecessor and successor auditor is
to allow predecessor to disclose information which would otherwise be confidential
to help the successor auditor evaluate whether to accept the engagement
to help the client by facilitating the change of auditors
Hill, CPA, has been retained to audit the financial statements of Monday Co. Monday's predecessor auditor was Post, CPA, who has been notified by Monday that Post's services have been terminated. Under these circumstances, which party should initiate the communication between Hill and Post?
Hill, the successor auditor.
Post, the predecessor auditor
Monday's controller of CFO.
The chairman of Monday's board of directors
In an audit, communication between the predecessor and successor auditor should be
authorized in an engagement letter
acknowledged in a representation letter
either written or oral
written and included in the working papers
Arnel, CPA, is succeeding Von, CPA, on the audit engagement of Almar Corporation. Arnel plans to consult Von and to review Von’s prior year working papers. Arnel may do so if
Von and Almar consent
Almar consents
Von consents
Von and Arnel consent
Before accepting an audit engagement a successor auditor should make specific inquiries of the predecessor audit regarding
Disagreements the predecessor had with the client concerning auditing procedures & accounting principles.
The predecessor’s evaluation of matters of continuing accounting significance
The degree of cooperation the predecessor received concerning the inquiry of the client’s lawyer.
The predecessor‘s assessment of inherent risk and judgments about materiality.
Which of the following factors most likely would influence an auditor’s determination of the auditability of the entity’s financial statements
The complexity of the accounting system
The existence of related party transactions
The adequacy of the accounting records
The operating effectiveness of control procedures
Hawkins requested permission to communicate with the predecessor auditor and review certain portions of the predecessor auditor's work papers. The prospective client's refusal to permit this will bear directly on Hawkin's decision concerning the:
Adequacy of the preplanned audit program
The audit engagement letter should generally include a reference to each of the following except
The expectation of receiving a written management representation letter
A request for the client to confirm the terms of the engagement