Before Accepting an Engagement, the Auditor Should Identify Special Circumstances

question 35

Multiple Choice

Before accepting an engagement, the auditor should identify special circumstances and unusual risks. Which of these conditions is not directly part of a review of such a circumstance or risk?

• A) reviewing industry and economic data.
• B) identifying intended users of the audited financial statements.
• C) assessing a prospective client's legal and financial stability.
• D) evaluating the entity's auditability.

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Definitions:

Collective Behaviour

Actions or activities undertaken by a group of people with a common interest or purpose, often spontaneous rather than traditional.

Social Movement

Social movement is a collective effort by a large group of people to bring about or resist social change, driven by common interests, ideologies, or goals.

Inspirations

The process of being mentally stimulated to do or feel something, especially to do something creative.

Theories of Collective Behaviour

Scholarly explanations which explore how groups of people act together in situations not governed by formal rules, often in response to an event or a shared belief.