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

question 32

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 on the engagement 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.

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Definitions:

STP (Shielded Twisted Pair)

Network cable with extra foil to prevent outside noise from interfering with data on the cable.

Loopback Plug

A device used to test the ports of a computer by plugging it into a port and sending signals through it, verifying the operation and responsiveness of the port by looping the signal back to the source.

NIC (Network Interface Card)

A port on a device that allows connectivity to a network. A NIC can connect to a wired or wireless network.

Cable Tester

A tester that checks coaxial and UTP cable ends (depending on the model) to determine if cable terminals are suitable for use.