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WorksheetsInitial Engagement and Audit Planning
Total questions: 10
Worksheet time: 10mins
Which of the following is not one of the three main reasons why the auditor should properly plan engagements?
To help keep audit costs reasonable.
To enable the auditor to obtain sufficient competent evidence.
To avoid misunderstandings with the client.
To enable proper on-the-job training of employees.
Which of the following is not typically included in initial audit planning?
Client acceptance or continuation decisions.
Determination of the purpose of the audit.
Perform preliminary analytical procedures.
Schedule engagement staff and audit specialists.
The purpose of an engagement letter is to
Notify the audit staff of an upcoming engagement so that personnel scheduling can be facilitated.
Document the CA firm's responsibility to external users of the audited financial statements.
Document the terms of the engagement to writing in order to minimize misunderstandings.
All of the above.
Which of the following factors partially explains the increased importance of understanding the client's business?
Increased connectedness of clients with their suppliers and customers via information technology.
Increased importance of human capital and other intangible assets.
Expansion of operations to have a global reach.
All of the above.
An understanding of a client's external environment includes
Regulatory requirements.
General economic conditions.
The extent of competition within the industry.
All of the above.
A tour of the client's facilities is helpful in obtaining an understanding of the client's operations because
The auditor may be better able to assess certain inherent risks.
The auditor will be able to assess the physical safeguards over assets.
The auditor obtains a broader perspective about the company as a whole.
All of the above.
The corporate minutes are the official record of the meetings of the board of directors and stockholders. The minutes typically include authorizations related to which of the following?
Dividend payments.
Corporate officer compensation.
Significant acquisitions of property, plant and equipment.
All of the above.
The engagement letter
Affects the CA firm's responsibility to external users of audited financial statements.
Is useful only if it is an audit engagement, but has no effect for review or compilation services.
Can be used to alter the auditor's responsibilities under generally accepted auditing standards.
Can affect legal responsibilities to the client.
Which of the following would not be found in the memorandum of association?
The rules and procedures adopted by the stockholders.
The kinds and amount of capital stock authorized.
The types of business activity that the corporation is allowed to conduct.
The date of incorporation.
Which of the following would not usually be included in the minutes of the board of directors or shareholders?
Authorization of long-term loans.
Declaration of dividends.
Authorization of individuals to sign checks. .
The duties and powers of the corporate officers
