Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's
understanding as to the reasons for the change of auditors.
A written understanding between the auditor and the client concerning the auditor's responsibility for the discovery of illegal acts is usually set forth in an
Miller Retailing, Inc., maintains a staff of three full-time internal auditors who report directly to the audit committee. In planning to use the internal auditors to help in performing the audit, the independent auditor most likely will
place limited reliance on the work performed by the internal auditors.
During the initial planning phase of an audit, a CPA most likely would
discuss the timing of the audit procedures with the client's management.
As generally conceived, the audit committee of a publically held company should be made up of
members of the board of directors who are not officers or employees.
An auditor who discovers that a client's employees paid small bribes to municipal officials most likely would withdraw from the engagement if
management fails to take the appropriate remedial action.
Which of these statements concerning illegal acts by clients is correct?
An auditor's responsibility to detect illegal acts that have a direct and material effect on the financial statements is the same as that for errors and fraud.
To help plan the nature, timing, and extent of substantive procedures, preliminary analytical procedures should focus on
enhancing the auditor's understanding of the client's business and of events that have occurred since the last audit date.
The primary objective of final analytical procedures is to
assist the auditor in assessing the validity of the conclusions reached.
For all audits of financial statements made in accordance with generally accepted auditing standards, the use of analytical procedures is required to some extent
in the planning and review stages, not REQUIRED in the substantive test.
The substantive analytical procedure known as trend analysis is best described as
the examination of changes in an account over time.