Question: What types of inquiries about a prospective client should an
What types of inquiries about a prospective client should an auditor make to third parties?
Answer to relevant QuestionsWho is responsible for initiating the communication between the predecessor and successor auditors? What type of information should be requested from the predecessor auditor? Distinguish between illegal acts that are “direct and material” and those that are “material but indirect.” List five circumstances that may indicate that an illegal act has occurred.Give three examples of qualitative factors that might affect the overall materiality.For each of the following scenarios, perform the three steps in the materiality process: (1) determine overall materiality, (2) determine tolerable misstatement, and (3) evaluate the audit findings. Scenario 1: Murphy & ...In understanding the entity and its environment, the auditor gathers knowledge about which categories of information?
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