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:

Shock

A sudden and intense emotional or physical reaction to an unexpected event or piece of information.

Intended Goal

A planned or desired outcome that an individual or group aims to achieve.

Frustration

A feeling of upset or annoyance resulting from being unable to achieve a goal or satisfy a need.

Instrumental Aggression

Aggression aimed at achieving a specific goal, often involving hurting another as a means to an end rather than as an end in itself.