External Auditors Should Expect the Audit Committees at Their Clients

question 98

Multiple Choice

External auditors should expect the audit committees at their clients to ask them relevant and probing questions.Some of the relevant questions that audit committee members should ask the external auditor include all of the following except:

• A)What are the most significant risks to financial reporting at this company?
• B)What level of assurance do your procedures provide with respect to the annual financial statements?
• C)How do you calculate materiality and what is your materiality threshold for the engagement?
• D)How do you assess the competence of company personnel engaged in financial reporting and related processes?

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Definitions:

Mediating Process

A mechanism or sequence of events through which one variable exerts an influence on another variable within a causal framework.

Beneficial or Adverse

This term refers to outcomes or effects of actions or policies that can either be positive (beneficial) and contribute to the intended goals, or negative (adverse), and detract from those goals.

Different Levels

Distinct stages or degrees of hierarchy, progression, or intensity within a structure or system.

Strong Identification

A psychological state in which an individual feels a profound connection or sense of belonging with a group or organization.