Refer the Auditing in Practice feature, “Accepting a New Audit Engagement.” Assume that an auditor is following U.S. auditing standards. What communication must an auditor of a new client have? How does that requirement differ for auditors following international auditing standards?
Answer to relevant QuestionsHow do the sources of risk of misstatement listed help the auditor plan the audit?Auditing standards indicate that if the preliminary control risk assessment is low, the auditor must gain assurance that the controls are operating effectively.a. What is meant by testing the operating effectiveness of ...Assume that you are planning to test a client's reconciliation. You could test by either inspecting documentation of the reconciliation or by reperforming the reconciliation. What factors would cause you to choose ...When testing internal controls, does the auditor test the same transactions that management and the internal auditors tested, or does the auditor test different transactions? Explain your rationale.Identify typical accounting cycles not listed in the Exhibit and list their associated accounts.
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