Exam 8: Audit Planning and Analytical Procedures

A major consideration in assigning staff to an audit engagement is the experience levels required for the work, while a less important consideration is maintaining staff continuity on the engagement.

Two major factors that affect acceptable audit risk are the likely users of the financial statements and the likelihood of issuing an unqualified audit opinion.

The cr code of ethics typically establishes the company's fiscal year and frequency of stockholder meetings.

If a prospective client has been audited in the past, the successor auditor will typically rely solely on the representations about the client by the predecessor auditor.

When may the auditor refer to a specialist in the audit report?

Written communication that the auditor will provide reasonable assurance for the detection of fraud is found in:

Which of the following would not likely be classified as a related-party transaction?

Material transactions between the client and the client's related parties must be disclosed in the auditor's report.

Which of the following statements is not correct?

The predecessor auditor is required to respond to the request of the successor auditor for information, but the response can be limited to stating that no information will be provided when:

When are auditors likely to encounter judgment problems in the use of analytical procedures?

An auditor must evaluate a specialist's professional qualifications and understand the objectives of the specialist's work.

Which of the following normally signs the engagement letter for an audit of a private company?

Define the term "related party" and discuss why an auditor should identify the client's related parties early in the audit.

Early appointment of the independent auditor will enable:

Auditors routinely conduct analytical procedures in the planning, testing, and completion phases of the audit. Identify the primary and secondary purposes of performing analytical procedures in each phase of the audit.

To evaluate a specialist's work the auditor must himself/herself be considered a specialist.

Most auditors assess inherent risk as high for related parties and related-party transactions because:

Which of the following statements is most correct concerning audit risk?

An engagement letter sent to a publicly held audit client usually would not include a: