Chapter 6: Audit Planning

Which of the following should not normally be included in the engagement letter for an audit?

A listing of the client's branch offices selected for testing.

In planning and performing an audit, auditors are concerned about risk factors for two distinct types of fraud: fraudulent financial reporting and misappropriation of assets. Which of the following is a risk factor for misappropriation of assets?

An unreliable accounting system.

The risk that the auditors will conclude, based on substantive procedures, that a material misstatement does not exist in an account balance when, in fact, such misstatement does exist is referred to as

Detection risk.

Which of the following should the auditors obtain from the predecessor auditors before accepting an audit engagement?

Facts that might bear on the integrity of management.

The audit committee of a company must be made up of:

Members of the board of directors who are not officers or employees.

As one step in testing sales transactions, a CPA traces a random sample of sales journal entries to debits in the accounts receivable subsidiary ledger. This test provides evidence as to whether:

Recorded sales have been properly posted to customer accounts.

Which portion of an audit is least likely to be completed before the balance sheet date?

Substantive procedures.