The Audit Process - Setting Terms for the Engagement - CPA Auditing and Attestation (AUD)

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Question

The engagement letter specifically mentions

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Auditors' communication with predecessor auditor may be either oral or in written form. The preferred standard however is written.

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Question

Auditors communication with predecessor auditor must be

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Among the items communicated with predecessor auditors are any disagreements with management. The purpose of this communication is to disclose any attempt to circumvent the applications of GAAP.

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Question

Communication with predecessor auditor should include:

Answer

In developing an audit plan, the engagement partner should identify the scope of the audit. Management is not involved in determining what opinion may be given by the auditors.

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Question

At a minimum, an understanding with a client should include:

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At a minimum, an understanding with a client should include the objectives and limitations of the engagement, as well as the responsibilities of management and of the auditor.

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Question

An auditor's engagement letter would most likely include a statement regarding:

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The auditor is required to establish an understanding with the client, and this understanding should be documented in the form of an engagement letter. The understanding should encompass management's responsibilities which include providing the auditor with a representation letter at the conclusion of the engagement.

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Question

Of the following examples, which would dictate the need for an Other-Matter paragraph?

Answer

If there is a piece of information critically important to the understanding of financial statements, the auditor will point it out through an Other-Matter paragraph.

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