A3 - Engagement Acceptance & Understanding the Assignment

Question 1

A successor auditor ordinarily should request to review the predecessor’s audit documentation relating to:

Answer 1

Contingencies, and internal control. A review of the predecessor’s audit documentation related to matters of continuing accounting and auditing significance would be permitted.

Question 2

A scope limitation sufficient to preclude an unmodified opinion always will result when management:

Answer 2

Refuses to acknowledge its responsibility for the fair presentation of the financial statements in conformity with GAAP.

Question 3

A successor auditor should make specific and reasonable inquiries of the predecessor auditor regarding the predecessor’s:

Answer 3

Understanding of the reasons for the change in auditors.

Question 4

A successor auditor is required to attempt communication with the predecessor auditor prior to:

Answer 4

Accepting the engagement

Question 5

Prior to commencing fieldwork, an auditor usually discusses the general audit strategy with the client’s management. What do the auditor and management agree upon at this time?

Answer 5

The coordination of the assistance of the client’s personnel in data preparation.