Before Accepting an Engagement to Audit a New Client, a CPA

question 17

Multiple Choice

Before accepting an engagement to audit a new client, a CPA is required to obtain:

• A)an assessment of fraud risk factors likely to cause material misstatements.
• B)an understanding of the prospective client's industry and business.
• C)the prospective client's signature to a written engagement letter.
• D)the prospective client's consent to make inquiries of the predecessor, if any.

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Definitions:

Quality Analysis Report

A document detailing the outcome of a quality assessment process, highlighting strengths, weaknesses, and recommendations for improvements.

Defect Rate

The frequency at which errors or imperfections occur in a product, process, or service, typically expressed as a proportion of the total output.

Feedback Source

The origin, either a person or system, from which feedback is received.

Counseling Objective

Refers to the goals set within a therapeutic context aiming to guide the client towards resolution or improvement of their issues.