A Typical Engagement Letter Should Contain the Following Comment: Because

question 17

Multiple Choice

A typical engagement letter should contain the following comment: Because of the concept of reasonable assurance and because we will not perform a detailed examination of all transactions, there is a risk that:

• A) we will detect only material errors."
• B) we cannot detect such acts that arise from collusion or direct actions on the part of upper management."
• C) material errors, fraud, or other illegal acts, may exist and not be detected by us."
• D) we cannot be relied upon to detect these items. We will, however, be available for special fraud-audit engagements."
• E) we will probably detect all material irregularities."

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Definitions:

Opening Phase

The initial stage in a process or activity, marking the beginning and setting the foundation.

Verbal Probes

Questions or statements used to elicit more detailed responses or information in a conversation.

Nonverbal Probes

Nonverbal probes are gestures or actions nonverbally carried out to elicit a response or gather information from someone without using words.

Interview

A formal or informal conversation where questions are asked to obtain information from a participant.