An Auditor Who Accepts an Audit Engagement and Does Not

question 24

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 a knowledge of matters that relate to the nature of the entity's business.
• C) Refer a substantial portion of the audit to another CPA who will act as the principal auditor.
• D) First inform management that an unqualified opinion cannot be issued.

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Definitions:

Purchase Requirements

Specifications and criteria set by buyers that must be met by suppliers for transactions to occur, including price, quality, delivery timelines, and service conditions.

Affect Value

Influence the worth or desirability of something, often referring to factors that can alter the perceived value of a product or service in the marketplace.

Purchasing Process

A series of steps undertaken by organizations to acquire goods or services from suppliers.

Recognized and Described

Acknowledged or identified and then explained or detailed in words.