When a CPA Is Approached to Perform an Audit for the First

question 14

Multiple Choice

When a CPA is approached to perform an audit for the first time, the CPA should make inquiries of the predecessor auditor. This is a necessary procedure because the predecessor may be able to provide the successor with information that will assist the successor in determining:

• A)whether the predecessor's work should be utilized.
• B)whether, in the predecessor's opinion, the financial statements are materially correct.
• C)whether, in the predecessor's opinion, the company's internal controls have been satisfactory.
• D)whether the engagement should be accepted.

---

Definitions:

Flooding

The overflowing of water beyond its normal confines, typically over what is normally dry land.

Quantity Supplied

The total supply of a good or service that producers are prepared to sell at a designated price over a fixed timeframe.

Quantity Demanded

The total amount of a good that buyers are willing and able to purchase at a given price within a specific time period.

Excess Demand

A situation where the demand for a product exceeds its supply at the current price, often leading to price increases.