Audit Quiz 2 Exam Questions (15 Terms) With Verified Definitions Updated 2024

In planning the audit engagement, the auditor should consider each of the following except A Risks of material misstatement due to fraud. B The kind of opinion (unmodified, qualified, or adverse) that is likely to be expressed. C The auditor's independence. D Anticipated levels of audit risk and materiality. {Ans: B The kind of opinion (unmodified, qualified, or adverse) that is likely to be expressed.}Hill, CPA, has been retained to audit the financial statements of Monday Co. Monday's predecessor auditor was Post, CPA, who has been notified by Monday that Post's services have been terminated. Under these circumstances, which party should initiate the communications between Hill and Post? A Post, the predecessor auditor. B Monday's controller or CFO. C The chair of Monday's board of directors. D Hill, the auditor. {Ans: D Hill, the auditor. Answer D is correct. AU-C 210 indicates that the auditor should communicate with the predecessor auditor before accepting the engagement. Initiation of the communication is the responsibility of the auditor. Moreover, the auditor should seek permission from the prospective client to inquire of the predecessor before final engagement acceptance. Thus, the auditor should ask the client to authorize the predecessor to make a