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

question 601

Multiple Choice

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

• A) An understanding of the prospective client's industry and business.
• B) The prospective client's signature to the representation letter.
• C) A preliminary understanding of the prospective client's control environment.
• D) The prospective client's consent to make inquiries of the predecessor auditor, if any.

---

Definitions:

Need-satisfaction

A sales approach focusing on identifying and meeting the specific needs of customers, ensuring they are satisfied with the products or services offered.

Industrial Products

Goods produced and used within industries, including machinery, materials, and equipment, intended for manufacturing or service provision.

Problem-solution

A methodology or approach that identifies an issue and provides a strategic answer or resolution to address it effectively.

Group Insurance

A type of insurance policy that covers multiple individuals under one contract, commonly offered to employees by their employers.