Which of the following statements would be least likely to be included in an audit engagement letter

In planning and performing an audit, auditors are concerned about risk factors for two distinct types of fraud: fraudulent financial reporting and misapproration of assets. Which of the following is a risk factor for misappropriation of assets?

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• Which of the following would not form part of an engagement letter?
• What is included in an audit engagement letter?
• Which of the following is least likely included in an audit engagement letter?
• Which of the following is not normally a part of an audit committee's responsibilities?

1. Generous performance-based compensation systems.
2. Management preoccupation with increased financial performance.
3. An unreliable accounting system.
4. Strained relationships between managment and the auditors.

3. An unreliable accounting system.

The audit of a company must be made of:

1. Representatives from the client's management, investors, supplies, and customers.
2. The audit partner, the chied financial officer, the legal counsel, and at least one outsider.
3. Representatives of the major equity interests, such as preferred and commong stockholders.
4. Members of the board of directors who are not officers or employees.

4. Members of the board of directors who are not officers or employees.

WHich of the following should not normally be included in the engagement letter for an audit?

1. A description of the responsibilities of client personnel to provide assistance.
2. An indication of the amount of the audit fee.
3. A description of the limitations of an audit.
4. A listing of the client's branch offices selected for testing.

4. A listing of the client's branch offices selected for testing.

Which portion of an audit is least likely to be completed before the balance sheet date?

1. Tests of controls.
2. Issuance of an engagement letter.
3. Substantive procedures.
4. Assesment of control risk.

3. Substantive procedures.

Which of the following should the auditors obtain from the predecessor auditors before acceptin an audit engagement.

1. Analysis of balance shet accounts.
2. Analysis of income statement accounts.
3. All matters of continuing accounting significance.
4. Facts that might bear on the integrity of managment.

4. Facts that might bear on the integrity of managment.

As one step in testing sales transactions, a CPA traces a random sample of sales journal entries to debits in the accounts receivable subsidiary ledger. This test provides evidence as to whether:

1. Each recorded sale represents a bona fide transaction.
2. All sales have been recorded in the sales journal.
3. All debit entries in the accounts receivable subsidiary ledger are properly supported by sales journal entries.
4. Recorded saless have been properly posted to customer accounts.

4. Recorded saless have been properly posted to customer accounts.

The primary objective of tests of details of transactions performed as substantive procedures is to:

1. Compy with GAAS
2. Attain assurance about hte reliability of the accounting system.
3. Detect material misstatements in the financial statements.
4. Evaluate whether management's policies and procedures are operating effectively.

3. Detect material misstatements in the financial statements.

The risk that they auditors will conclude, based on substantive procedures, that a material misstatement does not exist in an account balance when, in factm such misstatement DOES exist is referred to as:

1. Business Risk
2. Engagement Risk
3. Control Risk
4. Detection Risk

Which of the following elements underlies the application of GAAS, particulary the standards of fieldwork and reporting?

1. Adequate disclosure.
2. Quality control.
3. Materiality and audit risk.
Client acceptance.

3. Materiality and audit risk.

Which of the following best describes what is meant by the term "fraud risk factor"?

1. Factors that, when present, indicate that risk exists.
2. Factors often observed in circumstances where frauds have occured.
3. Factors that, when present, require modification of planned audit procedures.
4. Weaknesses in internal control identified during an audit.

2. Factors often observed in circumstances where frauds have occured.

Three conditions generally are present when fraud occurs. Select the one below is that is NOT one of those conditions:

1. Incentive or pressure
2. Opportunity
3. Supervisory position
4. Attitude

Which of the following is most likely to be an overall response to fraud risks indentified in an audit?

1. Supervise members of the audit team less closely and rely more upon judgement.
2. Use less predictable pocedures.
3. Use only certified publis accountants on the engagement.
4. Place increaed emphasis on the audit objective transactions rather than subjective transactions.

2. Use less predictable pocedures.

Which of the following would not form part of an engagement letter?

Answer and Explanation: The overview of the audit procedures should not be included in the engagement letter. The client should not have any idea on what procedures will the auditor perform during audit so that there will no intervention to be done by the company.

What is included in an audit engagement letter?

Audit Engagement Letters The engagement letter documents and confirms the auditor's acceptance of the appointment, the objective and scope of the audit, the extent of the auditor's responsibilities to the client and the form of any reports.

Which of the following is least likely included in an audit engagement letter?

Arrangement concerning the involvement of other auditors or experts in some aspects of the audit. An audit engagement letter least likely includes a. A reference to the inherent limitation of an audit that some material misstatements may remain undiscovered.

Which of the following is not normally a part of an audit committee's responsibilities?

An audit committee's responsibilities normally would not include: discussing the meaning and significance of audited financial statements. discussing problems and experience with independent auditors in completing the audit of annual financial statements. nominating the independent auditors.

Which of the following is least likely included in an audit engagement letter?

Which of the following statements most likely would be included in an audit engagement letter?

Which of the following matters are to be included in an audit engagement letter?

Which of the following should ordinarily be included in the engagement letter?