An Auditor Who Accepts an Audit Engagement and Does Not

question 20

Multiple Choice

An auditor who accepts an audit engagement and does not possess the industry expertise of the business entity should:

• A)engage financial experts familiar with the nature of the business entity.
• B)obtain knowledge of matters that relate to the nature of the entity's business.
• C)refer a substantial portion of the audit to another auditor, who will act as the principal auditor.
• D)first inform management that an unmodified auditor's opinion cannot be issued.

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Definitions:

Fundamental Principle

A basic idea, concept, or rule that serves as the foundation for a system of belief or behavior or for a chain of reasoning.

International Trade

International trade entails the exchange of goods and services between countries, contributing to the global economy through imports and exports.

Opportunity Costs

Missing out on possible rewards from different opportunities when selecting a specific option.

Quota

A governmental limit on the quantity of a product that can be produced or imported within a given timeframe, often to protect domestic industries.