ACC531 CH 3
Statement 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
_______ auditors must ask management to authorize the predecessor auditors to discuss confidential information
Successor
Which of the following would an auditor most likely use in determining overall materiality when planning the audit?
The entity's income before taxes for the period-to-date (e.g., 6 months)
The engagement partner and manager review the work of engagement team members to evaluate the following:
The work was performed and documented, the objectives of the procedures were achieved, the results of the work support the conclusions reached
Successor auditors need to communicate with predecessor auditors ______ accepting the engagement
before
If predecessor auditors refuse communication, successor auditors ________ accept the engagement
can
If the independent authors decide that it is efficient to consider how the work performed by the internal auditors may affect the nature, timing, and extent of audit procedures, they should assess the internal auditors'
competence and objectivity
When planning an audit, an auditor should
determine overall materiality for audit purposes
Shopping for accounting principles is _______ by Sarbanes-Oxley
discouraged
During the initial planning phase of an audit, a CPA most likely would
discuss the timing of the audit procedures with the entity's management
A written understanding between the auditor and the entity concerning the auditor's responsibility for fraud is usually set forth in a(n)
engagement letter
Communication between predecessor and successor auditors aids in evaluating the _________ of management
integrity
Tolerable misstatement is
materiality used to establish a scope for the audit procedures for the individual account balance or disclosures
As generally conceived, the audit committee of a publicly held company should be made up of
members of the board of directors who are not officers or employees
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