Flashcards 7

Question 1

what the engagement letter should contain are statements regarding:

Answer 1

• the basis of the auditor’s fee,
• the objective of the engagement and additional work to
  be performed such as management advisory services
• the fact that management is responsible for the entity’s financial statements.

Question 2

Which of the following procedures should an accountant perform during an engagement to compile prospective financial statements?

Answer 2

Make inquiries about the accounting principles used in the preparation of the prospective financial statements.

Question 3

Which of the following statements correctly describes the “top-down approach” used during an audit of internal control over financial reporting?

Answer 3

Begin by understanding the overall risks to internal control over financial reporting at the financial statement level.

Question 4

Which of the following statements ordinarily is included among the written management representations obtained by the auditor?

Answer 4

Management has made available to you all financial records and related data.