Followings are the four considerations at the early stage of accepting client and perform initial audit planning by an auditor EXCEPT:

• Client acceptance and continuance

• Identify client’s reasons for audit

• Set materiality

• Develop overall audit strategy

The purpose of the ___________ is to help prevention of misunderstandings with respect to the engagement

• management letter

• Confirmation letter

• audit report

• engagement letter

Which of the following is NOT the strategic systems in understanding of the client’s business and industry?

• Objectives and strategies

• Measurement and performance

• Personnel’s perspectives

• Management and governance

In understanding the client’s business and industry, auditors should understand client objectives related to __________.

• Financial reporting reliability

• Effectiveness and efficiency of operation

• Compliance with laws and regulations

• ALL of the above

Which of the following is NOT one of the three main reasons why the auditor should properly plan engagements?

• To enable proper on-the-job training of employees

• To enable the auditor to obtain sufficient appropriate evidence

• To avoid misunderstandings with the client

• To help keep audit costs reasonable

Which of the following is ONE of the procedures in the planning phase?

• Select staff to perform the audit

• Determine need for other professionals

• Prepare client proposal

• Determine materiality

Factors the auditor should understand the client’s business and industry are__________

• Major sources of revenue

• Key customers and suppliers

• Sources of financing

• All of the above

The auditor should be knowledgeable regarding the client's performance measures by making those same calculations. The client’s performance measurement system includes key performance indicators EXCEPT:

• market share

• unit sales growth

• Ratio analysis

• no. of staff

__________ is the risk that the client will fail

     to achieve its objectives

• Materiality risk

• Performance risk

• Client business risk

• Evidence risk

Analytical Procedures has been issued for the guidance of auditors in conducting this method of evaluating and obtaining evidence. These procedures include:

• A comparison of financial information

• Comparable information for prior periods

• Anticipated results, such as budgets forecasts

• Comparison different industry information