When Making a Client Continuance Decision the Auditor Should Evaluate

question 19

Multiple Choice

When making a client continuance decision the auditor should evaluate a client based upon which of the following?

• A)client entity characteristics.
• B)independence risk factors.
• C)financial reporting risks.
• D)all of the above.

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Definitions:

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Supplies

Materials or items which are used in the operation of a business or needed in the production process.

Services

Economic activities that are intangible, are not stored, and do not result in ownership transfer from the service provider to the service receiver.

Double-Entry

An accounting principle where every transaction is entered twice, as a debit in one account and a credit in another, to keep the accounting equation balanced.