Prior to Beginning the Fieldwork on a New Audit Engagement

question 43

Multiple Choice

Prior to beginning the fieldwork on a new audit engagement in which the audit team does not possess expertise in the industry in which the client operates, the audit team should:

• A)reduce audit risk by lowering the preliminary levels of materiality.
• B)design special substantive tests to compensate for the lack of industry expertise.
• C)engage financial experts familiar with the nature of the industry.
• D)obtain knowledge of matters that relate to the nature of the entity's business.