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Questions and Answers
What is the first step in initial audit planning?
What is the first step in initial audit planning?
- Identifying why the client wants or needs an audit
- Developing an overall strategy for the audit
- Deciding whether to accept a new client or continue serving an existing one (correct)
- Obtaining an understanding with the client about the terms of the engagement
What is the reason why some CPA firms refuse clients in high-risk industries?
What is the reason why some CPA firms refuse clients in high-risk industries?
- They lack financial stability
- They have poor relations with previous CPA firms
- They pose a risk of litigation (correct)
- They argue constantly with their auditors
Why is it important for the auditor to make a decision on accepting a new client or continuing with an existing one early?
Why is it important for the auditor to make a decision on accepting a new client or continuing with an existing one early?
- To avoid misunderstandings with the client
- To develop an overall strategy for the audit
- To avoid incurring significant costs that cannot be recovered (correct)
- To identify why the client wants or needs an audit
What must a CPA firm investigate before accepting a prospective client?
What must a CPA firm investigate before accepting a prospective client?
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What is the purpose of obtaining an understanding with the client about the terms of the engagement?
What is the purpose of obtaining an understanding with the client about the terms of the engagement?
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What must successor auditors do for prospective clients that have previously been audited?
What must successor auditors do for prospective clients that have previously been audited?
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