Chapter_06 - Chapter 06 Student 1 Before accepting an...

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Chapter 06 Student: ___________________________________________________________________________ 1. 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. B. obtain the prospective client's signature on the engagement letter. C. prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. D. discuss the management representation letter with the prospective client's audit committee. 2. In assessing whether to accept a client for an audit engagement, an auditor should consider the: Entity's business risk Auditor's engagement risk A. Yes Yes B. Yes No C. No Yes D. No No 3. A prospective client's refusal to give permission to communicate with the previous auditor and review certain portions of the previous auditor's working papers will bear directly on the auditor's decision concerning the:
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4. Inquiry of the previous auditor is: 5. When an auditor is approached to perform an audit for the first time, the auditor should make inquiries of the previous auditor. This is a necessary procedure because the predecessor may be able to provide the successor with information that will assist the successor in determining: 6. What is the responsibility of an auditor with respect to communicating with the previous auditor in connection with a prospective new audit client? A. The auditor has no responsibility to contact the previous auditor. B. The auditor should contact the previous auditor regardless of whether the prospective client authorises contact. C. The auditor need not contact the previous auditor if the successor is aware of all available facts. D. The auditor should obtain permission from the prospective client to contact the previous auditor.
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