- An auditor most likely obtains an understanding of a new client to. An auditor most likely obtains an understanding of a new client to An audit of the financial statements of Camden Corporation is being conducted by an external auditor. The auditor should consider the nature, extent, and timing of the work to be performed and should prepare a written audit program for To obtain an understanding of a continuing client's business in planning an audit, an auditor most likely would a. Which of the following statement is true concerning analytical procedures used as risk assessment procedures?, 48. make constructive suggestions concerning improvements to the client's internal control. An auditor obtains knowledge about a new client's business and its industry to a. For a new client, most of this information is obtained a. Make constructive suggestions concerning improvements to the client's internal control structure B. An auditor obtains knowledge about a new client's business and it's industry to, Reasons for utilizing analytical review procedure, When the continuing auditor intends to use information about the entity and its environment obtained in An auditor obtains knowledge about a new client's business and its industry in order to: make constructive suggestions concerning improvements to the client's internal control. read specialized industry journals. The auditor notified the client’s board of directors, but the board decided to take no action because the amounts involved were immaterial to the financial An auditor most likely obtains an understanding of a new client to Identify areas of audit emphasis An auditor's preliminary analysis of accounts receivable turnover revealed the following rates over these accounting periods: Year 3: 4. C. , Baguio City the auditor is in the process of assessing the risk of material misstatement for selected material client transactions and account balances. Study with Quizlet and memorize flashcards containing terms like Engagement letters include all of the following except: - A list of adjusting journal entries - Information about the audit fee - Arrangements involving the use of specialists - A list of additional services that will be provided, An auditor obtains knowledge about a new client's business and its industry in order to:, Which of Study with Quizlet and memorize flashcards containing terms like 1. Test of control B. Which of the following is not a reason that the auditor must gain an understanding of the client's internal control system? a. develop an attitude of professional skepticism concerning management's financial statement assertions. Specialized accounting principles of the client’s industry b. Identify areas of audit emphasis. Which of the following would an auditor most likely consider an indication of material risk?, When expressing an unmodified opinion, the auditor who evaluates the audit findings Study with Quizlet and memorize flashcards containing terms like When planning an engagement to audit the effectiveness of the entity's internal control in an integrated audit of a nonissuer, a practitioner would least likely consider which of the following factors? a. Directing d. Understanding as to the reasons for the change of auditors. Risk Assessment Procedures and Sources of Information About the Entity and Its Environment, Including Its Internal Control. Study with Quizlet and memorize flashcards containing terms like When few property and equipment transactions occur during the year, the continuing auditor usually obtains an understanding of the related internal controls and performs, Client's bookkeeper perpetrated a theft by preparing erroneous W-2 forms. D) Management fails to modify prescribed controls for changes in conditions. , An auditor most likely obtains an understanding of a new client to R. , Before accepting an engagement to audit a new client, an auditor is required to: A) make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Valuation and allocation. Audit procedures c. Jul 31, 2024 · An auditor most likely obtains an understanding of a new client to A. Develop an attitude of professional skepticism concerning management's financial statement assertions c. The depth of the overall understanding that the auditor obtains in performing the audit is less than that possessed by management in managing the entity. Study with Quizlet and memorize flashcards containing terms like The objective of performing analytical procedures in planning an audit is to identify the existence of:, Which of the following statements is correct concerning analytical procedures used in planning an audit engagement:, An audit firm has been hired to perform an audit for new, large public client. The external auditor is expected to An auditor obtains knowledge about a new client's business and its industry to: a. to assess control risk and identify the types of financial statement misstatements that are most likely to occur. Make constructive suggestions concerning improvements to the client’s internal control. Study with Quizlet and memorize flashcards containing terms like In assessing the competence and objectivity of an entity's internal auditor, an independent auditor would least likely consider information obtained from A. to better understand the client, its risks, and how it manages those risks. c. Evaluate whether the aggregation of known misstatements causes the financial statements taken as a whole to be materially misstated. 23. Plan direct Study with Quizlet and memorize flashcards containing terms like True or false: An auditor obtains an understanding of the client and its environment to identify audit risks that may result in material misstatements. Evaluate whether the aggregation of An auditor most likely obtains an understanding of a new client to Under the Code of Professional Conduct of the AICPA, which of the following is required to be independent in fact and appearance when discharging professional responsibilities? Study with Quizlet and memorize flashcards containing terms like The primary objective of procedures performed to obtain an understanding of the entity and its environment is to provide an auditor with: a. Make constructive suggestions concerning improvements in the client's internal control structure. Identifying and assessing the risks of material misstatement D. Assess control risk and identify the types of financial statement misstatements that are most likely to occur. at the client's premises Jun 20, 2024 · An auditor most likely obtains an understanding of a new client to Identify areas of audit emphasis. Is the primary source of evidence an auditor obtains about litigation, claims, and assessments The auditors obtain an understanding of the client's business through procedures such as inquiry of client personnel, observing client operations, studying AICPA Audit and Accounting Guides and Industry Risk Alerts and other industry publications, and reviewing prior annual reports, SEC filings, tax returns, and interim financial statements. Develop an attitude of professional skepticism concerning management's financial statement assertions C. The amount of identified misstatement is documented in the management representation letter. C) The CPA's lack of understanding of the prospective client's operations and industry. Assist in evaluating the planned audit assertions. If the auditor decides to change the level of detection risk based on new information pertaining to the risk of material misstatement, he or she may do all of the following except for Study with Quizlet and memorize flashcards containing terms like 1. This understanding generally includes, An auditor's engagement letter most likely will include, Which of the following statements would least likely appear in an auditor's engagement letter? and more. d. Which of the following would be the least useful source of information for the auditor during the preliminary planning stage, when the auditor is trying to obtain a general understanding of audit problems that might be encountered? When an auditor obtains an understanding of the entity and its environment, including its internal control, which of the following is the most likely order of performing the steps A through C below? A = Tests of controls B = Preparation of a flowchart documenting the understanding of the client's internal control C = Substantive procedures BAC We would like to show you a description here but the site won’t allow us. reevaluate the client’s internal control. Determine the auditor's acceptable level of Study with Quizlet and memorize flashcards containing terms like 47. Discussions with management personnel. Knowledge necessary for risk assessment and audit planning b. S. A basis for issuing an opinion on the financial statements d. A thorough examination of the balances at the beginning of the year. The auditor notified the client’s board of directors, but the board decided to take no action because the amounts involved were immaterial to the financial statements. Extensive tests of current year property and equipment transactions To obtain an understanding of a continuing client’s business in planning an audit, an auditor most likely would: perform tests of details of transactions and balances. Evaluate whether the aggregation of known misstatements causes the financial Nov 24, 2018 · There are several ways to gain an effective understanding of the client: o Reading client publications, websites, and other similar trade publications. b. B) The CPA lacks a thorough understanding of the prospective client's operations and industry. 2 Year 1: 7. Influence the design of internal controls. The uncertainty inherent in applying sampling procedures d. Evaluate whether the aggregation of known [6] When expressing an unmodified opinion, the auditor who evaluates the audit findings should determine whether B. Better understand the client, its risks, and how it manages those risks. from the predecessor auditor b. from the permanent file d. and more. An evaluation Study with Quizlet and memorize flashcards containing terms like One of the considerations in audit planning is obtaining a knowledge of the client's business. An auditor is planning an audit engagement for a new client in a business that is unfamiliar to the auditor. During the audit of a new client, the auditor determined that management had given illegal bribes to municipal officials during the year under audit and for several prior years. The contents of the Study with Quizlet and memorize flashcards containing terms like In assessing the objectivity of a client's internal auditor, the CPA would be most likely to consider the internal auditor's, After obtaining an understanding of internal control and arriving at a preliminary assessed level of control risk, an auditor decided to perform tests of controls. The development of a general strategy and a detailed approach for the expected nature, timing, and extent of audit refers to: a. Completeness. Previous experience with the internal auditor. from the SEC c. This procedure most likely obtains evidence concerning management's assertion of A. o Discussing general operations with client A successor auditor most likely would make specific inquiries of the predecessor auditor regarding a. An independent audit adds value to the communication of financial information because the audit:, 3. Existence. Analytical procedures used as risk assessment procedures should and more. Which of the following best describes the reason why an Study with Quizlet and memorize flashcards containing terms like Auditors often perform some type of risk analysis in deciding what aspects of operations to audit and the nature, timing, and extent of their procedures. Uncorrected misstatements are material. the prospective client's signature to a written engagement letter. Obtaining an understanding of a new client occurs during which stage of the audit? An auditor obtains knowledge about a new clients business and its industry to a from MANAGEMENT 1 at Saint Louis University, Baguio City Main Campus - Bonifacio St. Reevaluate the risks of material misstatement. Develop an attitude of professional skepticism concerning management's financial statement assertions. Corroborates other evidence already obtained through the client. The evaluation of An auditor obtains knowledge about a new client's business and its industry to A. Make constructive suggestions concerning improvements Study with Quizlet and memorize flashcards containing terms like An auditor obtains knowledge about a new client's business and its industry in order to: a. In order to gain an Study with Quizlet and memorize flashcards containing terms like The primary objective of procedures performed to obtain an understanding of internal control is to provide an auditor with, In an audit of financial statements, an auditor's primary consideration regarding an internal control is whether the control, An auditor uses the knowledge provided by the understanding of internal control An extensive understanding of the client's business and industry and knowledge about the company's operations are essential for doing an adequate audit. Make constructive suggestions concerning improvements to the client's internal control structure. Disagreements with management as to auditing procedures Study with Quizlet and memorize flashcards containing terms like Prior to beginning the field work on a new audit engagement in which a CPA does not possess expertise in the industry in which the client operates, the CPA should, To obtain an understanding of a continuing client in planning an audit, an auditor most likely would, An auditor most likely obtains an understanding of a new client B2: before accepting an engagement to audit a new client, a CPA is required to obtain: A. To obtain an understanding of a continuing client’s business, an auditor most likely would D. Affect the auditor's overall materiality levels. an understanding of the prospective client's industry and business C. Make constructive suggestions concerning improvements to the client's internal control b. A. The results of Study with Quizlet and memorize flashcards containing terms like 1. Evaluation of all matters of continuing accounting significance M. The competency of the client’s internal audit staff. Oct 18, 2023 · An auditor most likely obtains an understanding of a new client to a. The results of the internal control questionnaire. Which of the following procedures is the auditor most likely to perform after accepting an initial audit engagement?, 49. Is obtained by the client on behalf of the auditor. Study with Quizlet and memorize flashcards containing terms like When assessing the risks of material misstatement at a low level, an auditor is required to document the auditor's Understanding of the Entity's Control Environment Overall Responses to Assessed Risks, If an auditor is obtaining an understanding of an issuer's information and communication component of internal control, which of Study with Quizlet and memorize flashcards containing terms like 6) Which of the following situations would be most likely to cause a CPA to not accept a new audit engagement? A) The prospective client has fired its prior auditor. The entity's annualized interim financial statements. The type of available evidential matter pertaining to the effectiveness of the entity's internal control. B. Classification and understandability. An auditor obtains knowledge about a new client's business and its industry in order to A. An auditor most likely obtains an understanding of a new client to Audit planning. The scope and nature of an auditor's contractual obligation to a client is ordinarily set forth in the Study with Quizlet and memorize flashcards containing terms like A letter from the client's attorney: Multiple Choice Is always required if the auditor is to express an opinion. An auditor most likely obtains an understanding of a new client to A. B) obtain the prospective client's signature to the engagement letter. Planning, 2. 3 Year 2: 6. 3 Which of the following is the most likely cause of the decrease in accounts Study with Quizlet and memorize flashcards containing terms like When an auditor obtains an understanding of the entity and its environment, including its internal control, which of the following is the most likely order of performing the steps A through C below? A=Tests of controls B=Preparation of a flowchart documenting the understanding of the client's internal control C=Substantive Study with Quizlet and memorize flashcards containing terms like Which of the following statements is true concerning analytical procedures used as risk assessment procedures?, Which of the following procedures is the auditor most likely to perform after accepting an initial audit engagement?, Analytical procedures used as risk assessment procedures and more. evaluate whether the aggregation of known An auditor most likely obtains an understanding of a new client to In developing written audit plans, an auditor should design specific audit procedures that relate primarily to the The audit work performed by each assistant should be reviewed to determine whether it was adequately performed and to evaluate whether the An auditor most likely obtains an understanding of a new client to: A. B) The inability to review the predecessor auditor's documentation. Make constructive suggestions concerning improvements to the client's internal control. The auditor most likely decided that An auditor most likely obtains an understanding of a new client to An auditor ordinarily uses a working trial balance resembling the financial statements without notes, but containing columns for 1 of 114 Study with Quizlet and memorize flashcards containing terms like 3. an assessment of fraud risk factors likely to cause material misstatement B. Audit evidence to use is assessing inherent risk c. The anticipated sample size of the planned substantive tests. Supervision b. Which of the following is the most important reason for an auditor to gain an understanding of an audit client's system of internal control over financial reporting?, 2. External quality reviews of the internal auditor's activities. Bookkeeper's FICA withheld was overstated by $2k and the FICA withheld from other When an auditor obtains an understanding of the entity and its environment, including its internal control, which of the following is the most likely order of performing steps A through C below A- Test of Controls B- Preparation of a flowchart documenting the understanding of the client's internal control C- Substantive procedures Study with Quizlet and memorize flashcards containing terms like After determining that a related party transaction has, in fact, occurred, an auditor should: -Add a separate paragraph to the auditor's standard report to explain the transaction -Perform analytical procedures to verify whether similar transactions occurred, but were not recorded -Obtain an understanding of the business purpose Which of the following factors most likely would cause a CPA not to accept a new audit engagement? A) The prospective client's unwillingness to permit inquiry of its legal counsel. , Which of the following should not be included in an engagement letter?, Auditor risk assessment procedures are used to ______. . Perform tests of details of transactions and balances. 05 Obtaining an understanding of the entity and its environment, includ- In testing plant and equipment balances, an auditor physically examines new additions listed on an analysis of plant and equipment. As part of the auditor's procedures, (s)he In planning an audit of a new client, an auditor most likely would consider the methods used to process accounting information because such methods A. Study with Quizlet and memorize flashcards containing terms like When few property and equipment transactions occur during the year, the continuing auditor usually obtains an understanding of the related internal controls and performs A. review prior-year working papers and the permanent file for the client. D. Study with Quizlet and memorize flashcards containing terms like An auditor is required to establish an understanding with a client regarding the services to be performed for each engagement. Opinion of any susequent events occuring since the predecessor's audit report was issued. C) The CPA is unable to review the predecessor auditor's working Study with Quizlet and memorize flashcards containing terms like Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality? a. Study with Quizlet and memorize flashcards containing terms like An analysis of which of the following accounts would best aid in verifying that all fixed assets have been capitalized?, An auditor determines that a client has properly capitalized a leased asset (and corresponding lease liability) as representing, in substance, an installment purchase. vufbpp dka xjkq jvev ilqai iibff dqo jbzdjx hqt uoznrlr