When an Auditor Agrees to Perform an Audit Because the Preconditions

question 55

Multiple Choice

When an auditor agrees to perform an audit because the preconditions for an audit have been met and the auditor believes that he can gather sufficient appropriate audit evidence to reduce audit risk to an acceptably low level,an engagement letter is prepared.The engagement letter includes:

• A)the basis on which fees are computed are based on an unqualified audit opinion.
• B)arrangements regarding the methods and testing of the audit,including the composition of the audit team.
• C)arrangements concerning the opinions of other auditors and specialists in the audit.
• D)arrangements concerning the involvement of internal auditors and other staff of the company.
• E)arrangements to be made with the predecessor auditor in the case of a follow up audit.

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Definitions:

Employment-At-Will Policy

A doctrine in U.S. labor law that states an employer can terminate an employee at any time for any reason, except an illegal one, and without warning, as long as the reason is not illegal.

Promote-From-Within Policy

A company policy that prioritizes the advancement of current employees to higher positions over hiring outsiders.

Lead-The-Market Strategy

A competitive approach where a company aims to position itself as the top choice in its industry by offering better terms, conditions, or benefits to its employees.

Internal Source

An internal source refers to information, resources, or candidates originating from within an organization, as opposed to those found externally.