Before accepting an engagement to audit a new client. Difficulty: Medium Source: AICPA.
Multiple choice question. Ethics is a key to client acceptance. The potential damage can range from Study with Quizlet and memorize flashcards containing terms like Which of the following auditor concerns most likely could be so serious that the auditor would conclude that a financial statement audit cannot be conducted?, Before accepting an engagement to audit a new client, an auditor is required to:, When applying analytical procedures during an audit, which of the following is the best 2) Before accepting an engagement to audit a new client, an auditor is required to: A) make inquiries of the predecessor auditor after obtaining the consent of the prospective client. 5. 1 day ago · Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to: a. Sep 1, 2021 · Unilateral engagement letters include a statement that, through the client's provision of information to the CPA and the CPA's delivery of service to the client, the client has accepted the firm's terms as set forth in the engagement letter provided to the client. . A full Driving Licence. Scope of This Section. The CPA is unable to review the predecessor auditor's working papers due to Initial engagement acceptance. Obtain a copy of the client’s financial statements. There are many ways an auditor can accumulate evidence to meet the overall audit objectives. The CPA lacks a thorough understanding of the prospective client's operations and industry. - make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Tell the client whether or not the auditor is willing to issue a "clean" opinion. obtain the prospective client's signature to the engagement letter. Materiality for planning purposes is: A. Potential threats to integrity or find audit engagement letters informative for their clients. When considering appointment to a new client we strongly advise firms to exercise due caution and assess the risks involved. Obtain the prospective client's signature to the engagement letter. B) obtain the prospective client's signature to the engagement letter. the prospective client's consent to make Before accepting an engagement to audit a new client, a CPA is required to obtain: a. Required: Select the order of the steps AOW should follow with regard to dealing with a predecessor auditor and a new client before accepting the engagement 1 Advise Smith & Smith of Lancaster's decision to change auditors. The engagement letter will do one, or all of the following: 1. AOW has asked Lancaster to Inform Smith & Smith of the decision to change auditors, but he does not wish to do so. The prospective clients consent to make inquiries of the previous auditor, if any. Today, most companies and industries rely heavily on data, and the ability for auditing teams to Jul 8, 2024 · Before accepting an engagement to audit a new client, a CPA is required to make inquiries of the predecessor auditor obtaining the consent of the prospective client obtain the prospective client's signature to the engagement letter Accepting new audit clients. Study with Quizlet and memorize flashcards containing terms like 11. c. an understanding of the prospective client's industry and business b. 135; SAS No. 20 hours ago · Study with Quizlet and memorize flashcards containing terms like When initiating communications with predecessor auditors, prospective auditors should expect: A. Asking the right questions from the client while considering new clients or continuance of existing clients, is a key first step for establishing a quality audit and relationship between the auditor and client. Syllabus B. The prospective client's consent to make inquiries of the predecessor auditor. This includes: an independence assessment; a pre-engagement assessment; and; communications with the previous auditor (if applicable). helpful to the successor and may facilitate the successor's audit, but is not required either before or after acceptance of the client. Question: 18. The Office will act as auditor or joint auditor for all parent Crown corporations. d. ) Specific inquiries of the predecessor regarding communication to management, the audit committee, and those charged with governance about operational inefficiencies Before accepting an engagement to audit a new client, a CPA is required to obtain A. a. before accepting an engagement to audit a new client, a CPA is required to obtain: a. obtain the prospective client's signature to the engagement letter c. The CPA is unable to review the predecessor auditor's working papers. We ask similar questions about accepting a new client. An understanding of the prospective client’s control environment d. State whether the CPA will perform audit, review, or compilation services. It specifies the nature of the contract between the audit firm and the client and minimises the risk of any misunderstanding of the auditor's role. No services should commence until the client has signed the engagement letter. 03 An auditor should not accept an engagement until the communications described in paragraphs . - obtain the prospective client's signature to the engagement letter A. The objective and scope of the audit and the extent of the auditor’s responsibilities to the client are best documented in: a. ) No, No, Yes c. Next up. The auditor should also obtain an understanding of a. the prospective client's signature to a written engagement letter d. Obtain the prospective client's signature on the engagement letter. The following are some of the key findings from practice review related to the audit firm’s implementation of one of the elements of quality control (ISQC 1), which is “client acceptance and continuance relationships”. To take responsibility for obtaining the client's consent for the predecessor to give information about prior audits. Feb 9, 2022 · What general points should an auditor consider before accepting a new audit client? Client acceptance evaluation should include General Considerations, Management Integrity, Management Commitment to GAAP, Management Internal Control Consciousness, Financial Strength of the Client, and Other Risk Factors. If the company is not morally straight, then there’s no need to move forward. An auditor must perform preliminary engagement activities before accepting a new audit client to ensure independence and assess any integrity issues. An understanding of the Study with Quizlet and memorize flashcards containing terms like While clients are very particular about which auditor they will select, auditors are willing to accept any client due to the financial benefits they receive. B) possible D) Management fails to modify prescribed controls for changes in conditions. Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. Which of the following procedures would a CPA most likely perform in the planning phase of a financial statement audit? 27. prepare a memorandum setting forth the staffing requirements and documenting the preliminary View Test Prep - Chapter_06 from ACCT 3708 at University of New South Wales. Client acceptance decisions are difficult. ) No, Yes, Yes, Which of the following inquiries should be made of a predecessor auditor before accepting a new client engagement? a. (Note if the above documents are not available refer to the Firm’s procedures Before accepting an audit engagement, a CPA should evaluate whether conditions exist that raise questions as to the integrity of management. b. The auditor may wish to advise the prospective client (for example, in a proposal) that Apr 12, 2024 · Accepting an audit engagement is a significant responsibility for any accounting firm. Prior to accepting the engagement, the firm must <p>Before accepting an audit engagement, auditors must acquire an understanding of the client's business. When accepting new clients, look to SAS No. New engagement process. 137; SAS No. 01 Explain why the decision to accept a client is important, and describe the primary features of client acceptance and continuance, including the purpose and content of an audit engagement letter Topic: Client acceptance and continuance Downloaded by Sophie Penh ([email protected]) lOMoARcPSD|3368493 Before accepting an engagement with a new client the CPA firm shall assess the from AA 1 May 13, 2023 · Before accepting an engagement to audit a new client, a CPA is required to obtain information about the client's business, its operations, and its financial statements. Study with Quizlet and memorize flashcards containing terms like which of the following auditor concerns most likely could be so serious that the auditor would conclude that the financial statement audit cannot be conducted, before accepting an engagement to audit a new client, an auditor is required to, which of the following steps should an auditor perform first to determine the existence of Before accepting an engagement to audit a new client, a CPA is required to obtain A. The learning outcomes include the explanation of matters that should be considered and procedures that should be followed by a firm before accepting a new client, a new engagement for an existing client, or agreeing the terms of any new Before accepting an engagement to audit a new client, a CPA is required to obtain: the prospective client's consent to make inquiries of the predecessor, if any. The inability to review the predecessor auditor's working papers. The increase in competition for new clients among CPAs in recent years only sharpens this conflict. <br />Auditors should understand the nature of the operations of the client, as well as the governance structure, ownership, financing Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to:, Which of the following procedures would a CPA most likely perform in the planning phase of a financial statement audit?, Which of the following matters does an auditor usually include in the engagement letter? and more. Audit standards require us to consider whether the prospective client has integrity. To conduct interviews with the partner and manager in charge of the predecessor public accounting firm's Jul 3, 2022 · 6) Before accepting an engagement to audit a new client, an auditor is required to: A. The Office shall perform initial acceptance procedures concerning all requests for appointment by Order in Council (appointments under Section 11 of the Auditor General Act), as well as for all other engagements where the Professional ethics and the new audit engagements. 17. Your decision to accept a new appointment should be based on a thorough, risk-based critical assessment of the proposed engagement. make enquiries of the predecessor auditor after obtaining the consent of the prospective client. Yes, No, No b. May not be prepared each period for a recurring audit engagement b. They need to have an understanding of the prospective client's industry and business, which involves understanding the client's operations, the economic environment in which they operate, and any specific industry standards that apply. The prospective client's signature to the engagement letter C. Testing beginning balances for the current year. Obtaining and accepting audit engagements. An audit engagement letter a. Audit program Jan 23, 2015 · Which of the following factors most likely would cause a CPA not to accept a new audit engagement? a. Making a proposal for the audit engagement. 134; SAS No. Client’s representation letter b. required after acceptance of a new client regarding matters the successor believes may affect the conduct of his or her audit. Nov 3, 2022 · Here, taking the additional time to really understand the specific risks in detail before accepting the engagement, enabled the firm to take on an audit client that they might previously have dismissed. The CPA must also evaluate the risks involved in the engagement and assess whether they have the necessary skills and resources to perform the audit effectively. 1 Before accepting a new client relationship, a professional accountant in public practice* should consider whether acceptance would create any threats to compliance with the fundamental principles. It also addresses, when applicable, the responsibilities of the engagement quality con-trol reviewer. The indications that management has not investigated employees in key positions before hiring them. Study with Quizlet and memorize flashcards containing terms like Hawkins requested permission to communicate with the predecessor auditor and review certain portions of the predecessor auditor's working papers. required about matters that have a bearing on acceptance of the client. Before agreeing to perform an audit, it is crucial to conduct thorough due diligence to assess potential risks and ensure that the firm is well-equipped to provide quality audit services. An understanding of the prospective client's industry and business B. A preliminary understanding of the prospective client’s industry and business b. Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding a. Decision to accept an appointment Smith, CPA, has requested permission to communicate with the predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client. If the auditor is unable to agree to a change of the terms of the audit engagement and is not permitted by management to continue the May 4, 2021 · By MIA Practice Review Department. The prospective client's signature to the representation letter. If the terms of the audit engagement are changed, the auditor and management shall agree on and record the new terms of the engagement in an engagement letter or other suitable form of written agreement. Client Acceptance or Continuance– Need to Know when to say no or yes. 138. Finally, when the decision is made to accept a new engagement, an engagement letter should be drafted and, for high-risk engagements, reviewed by the committee before it is sent to the client. Chapter 7--Accepting the Engagement and Planning the Audit There are four phases of an audit: 1--accepting the audit engagement 2--planning the audit 3--performing audit tests 4--reporting the findings The audit engagement decision is the result of two sets of decisions: the prospective client’s and the proposed audit firm’s. Many of the audit networks have some version of formal know-your-client, client acceptance and engagement acceptance policies and procedures. Shall include the specific audit procedures to be performed by the auditor d. Staff will need to be rescheduled to cover this new client. A preliminary understanding of the prospective client’s control environment. Chapter 06 Student: _ 1. disagreements the predecessor had with the client concerning auditing procedures and accounting principles. 2. attempt to communicate with the predecessor auditor before accepting the engagement. His fourth year on the audit, his client, Manchester Financial Group (Manchester), thinks highly of him. Planning And Risk Question: 444 Before accepting a new client engagement, an auditor should: O Contact the predecessor auditor and arrange to review the audit files from the previous year's audit. We would like to show you a description here but the site won’t allow us. Tell the company whether or not the auditor is willing to issue a "clean" opinion. The communication may be either written or oral. discuss the management representation letter with the prospective client's audit committee. It is in the interest of both client and auditor that the auditor sends an engagement letter1, preferably before the commencement of the engagement, to help in avoiding Audit firms; client acceptance; engagement risk assessment; engagement risk factors 1 INTRODUCTION The Enron corporate scandal, which resulted in its properly before accepting them for a new audit Before accepting an engagement to audit a new client, a CPA is required to obtain An assessment of fraud risk factors likely to cause material misstatements. Even in those situations the auditor may still find audit engagement letters informative for their clients. This includes communicating with the predecessor auditor, if any, to understand the reasons for termination and gather information about the client's accounting practices and any disagreements. One of the most significant and potentially problematic relationships is between the audit firm and the audit client. <br />An auditor should review the prior year audit documentation as well as the client's permanent file to understand the continuing client's business. seek the SEC's permission to accept the engagement if Wooten is publicly owned. The auditors must consider materiality in planning an audit engagement. A preliminary understanding of the prospective client's control environment D. , 2) Before accepting an engagement to audit a new client, an auditor is required to: A) make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Audit engagement letter d. The prospective client's Aug 26, 2020 · After the decision is made to accept an audit engagement, the auditing team does a thorough risk assessment of the client’s company, which includes assessing the industry, management’s integrity, governance procedures, and internal controls. make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Mar 26, 2024 · Before accepting an engagement to audit a new client, a CPA is required to obtain several key items. Before accepting an engagement to audit a new client an auditor is required to? a. Which of the following factors most likely would cause a CPA to not accept a new audit engagement? A. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to obtain, Which of the following situations would most likely require special audit planning?, During the initial planning phase of an audit, a CPA most likely would and more. Make inquiries of the predecessor auditor after obtaining the consent of the prospective client. The learning outcomes include the explanation of matters that should be considered and procedures that should be followed by a firm before accepting a new client, a new engagement for an existing client, or agreeing the terms of any new D. ” If your client is new, this SAS addresses special procedures that should take place before you agree to work with the client. The prospective clients signature to the representation letter c. If the engagement has 33. C) a preliminary understanding of the prospective client's control environment. Evaluation of all matters of continuing accounting significance. Before accepting an engagement to audit a new client, an auditor is required to: (a) Make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Awareness of the consistency in the application of generally accepted accounting principles between periods. D B. An understanding of the prospective client’s industry and business. Understanding the prospective client's business and the industry in which it operates. Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. 20 hours ago · Study with Quizlet and memorize flashcards containing terms like Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's A. Making inquiries of the predecessor auditor regarding matters that may affect the conduct of the audit. Explanation: Before accepting an engagement to audit a new client, a CPA is required to obtain the prospective Before accepting an initial audit engagement, an auditor should make specific inquiries of the predecessor auditor regarding which of the following? a) The predecessor's awareness of the consistency in the application of generally accepted accounting principles. preliminary engagement activities client acceptance and continuance planning the audit, Select all that apply Before accepting a new client, a public accounting firm must determine if it Blank______. 20 hours ago · Before accepting an engagement to audit a new client, an auditor is required to: - discuss the management representation letter with the prospective client's audit committee. a preliminary . An understanding of the prospective client's industry and business. the predecessor's evaluation of matters of continuing accounting The Client Acceptance and Retention Process: How Policies and Procedures Are Developed recommended procedures related to an audit firm’s decision to accept new The engagement letter will be sent before the audit. (The predecessor auditor can provide information about their interactions with the company. IFAC’s Code of Ethics for Professional Accountants states: ‘Before accepting a new client relationship, a professional accountant in public practice shall determine whether acceptance would create any threats to compliance with the fundamental principles. III. A preliminary understanding of the prospective client's control environment. A preliminary understanding of the prospective clients control environment d. Before accepting an engagement to audit a new client, an auditor is required to a. ) Yes, Yes, No d. Mar 26, 2016 · You also have to evaluate the possibility of your firm’s reputation being tarnished through association with the potential audit client. Before the audit firm accepts a proposed engagement to provide non-audit services to an audit client, the audit engagement partner shall: (i) consider whether a reasonable third party would regard the objectives of the proposed engagement as being inconsistent with the objectives of the audit; A written understanding between the auditor and the client concerning the auditor's responsibility for the discovery of illegal acts is usually set forth in a(n) A. It is in the interest of both client and auditor that the auditor sends an engagement letter, preferably before the commencement of the engagement, to help in avoiding misunderstandings with respect to the engagement. prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan. According to one CPA, a natural conflict of interest exists in the decision between screening a new client for rejection or acceptance versus obtaining new clients and making a profit. The prospective client's consent to Before accepting an engagement to audit a new client, a CPA is required to obtain A. 108, “Planning and Supervision. Case 1 – Impressing the Client. Accepting the engagement. [Nov-2005] New discretionary financial audit engagements. Before accepting an engagement to audit a new client, an auditor is required to make inquiries of the predecessor auditor after obtaining the consent of the prospective client. Study with Quizlet and memorize flashcards containing terms like When a company has changed auditors, according to the Professional Standards, the successor auditor has the responsibility to initiate contact with the predecessor auditor to ask about the client before the engagement is accepted; the predecessor has no responsibility to initiate this contact, even when aware of matters bearing AACSB: Analytic Difficulty: Easy Learning Objective: 05. Evergreen engagement letters indicate that services will continue unchanged until Before accepting an engagement to audit a new entity, an auditor is required to: a. C. Client representation letter. Before accepting an engagement to audit a new client, a CPA is required to obtain A. Planning And Risk Before accepting an engagement to audit a new client, an auditor is required to A. The prospective client's signature on the engagement letter. 122; SAS No. Aug 22, 2020 · 1) Before accepting an engagement to audit a new client, an auditor should: a) make inquiries of predecessor auditor b) preparing a planning memo documenting preliminary audit plan c) document their understanding of company's system of internal control d) Establish the level of materiality for engagement 2) Matching the assertion related to purchasing to the PCAOB catergory ----- all recorded Relevant to ACCA Qualification Paper P7 The syllabus for Paper P7, Advanced Audit and Assurance includes Professional Appointments (syllabus reference C4). Engagement letter. Mar 11, 2024 · Before accepting an engagement to audit a new client, a CPA is required to obtain. IFAC’s Code of Ethics for Professional Accountants states: ‘Before accepting a new client relationship, a professional accountant in public practice shall determine whether acceptance would create any threats to compliance with the fundamental principles (integrity, objectivity, professional competence and due care, confidentiality and ABSTRACT The audit function creates several important relationships among the various parties. The prospective client has fired its prior auditor. 10 have been evaluated. An assessment of fraud risk factors likely to cause material misstatements. Throughout this process, you can expect: Oct 5, 2021 · Factors to consider while deciding Continuance or Acceptance of a Client. b) The predecessor's understanding as to the potential client's reasons for the Before accepting an engagement to audit a new client, an auditor is required to a. After considering all the threats faced by the audit firm by accepting a new engagement, if some threats cannot be eliminated or reduced to a minimum level, either because the threat is too significant or appropriate safeguards cannot be applied, then the auditor should not accept the new audit and assurance engagement. Before accepting an engagement to audit a new client, an auditor is required to: A. review the predecessor's audit documentation if the audit is to be in accordance with GAAS. Client acceptance or continuance audit. Steps before the acceptance of an audit client . , Auditors are responsible to ensure that management accepts its responsibility for the preparation of the financial statements before accepting an audit engagement Introduction. Before accepting an engagement to audit a new client, a CPA is required to obtain: a. Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, an auditor is required to, Which of the following is a correct statement regarding the nature and timing of communications between an accounting firm performing an initial audit of an issuer and the issuer's audit committee? A. Make inquiries of the predecessor auditor. Which of the following conditions most likely would raise such questions? A. Jun 26, 2024 · Study with Quizlet and memorize flashcards containing terms like Which of the following auditor concerns most likely could be so serious that the auditor would conclude that a financial statement audit cannot be conducted?, Before accepting an engagement to audit a new client, an auditor is required to:, Which of the following statements is most accurate regarding sufficient and appropriate established by law. A known employer ID card bearing photo and signature. Before the audit begins, the auditor performs pre-engagement acceptance or continuance procedures. audit acceptance, planning and subsequent undertaking and completion of the audit can be broadly distilled into four phases, namely; Phase 1: Acceptance of the audit Phase 2: Planning the audit Phase 3: Documenting audit plan and strategy, performing the audit and gathering audit evidence Phase 4: Completing the audit and issuing an audit The firm to obtain such information as it considers necessary in the circumstances before accepting an engagement with a new client, when deciding whether to continue an existing engagement, and when considering acceptance of a new engagement with an existing client. Effective for audits of financial statements for periods ending on or Management has a reputation for consulting with several accounting firms about significant accounting issues, Before accepting an engagement to audit a new client, a CPA is required to obtain: a. The firm will have to hire an expert in one audit area. The client’s financial reporting system has been in place for 10 years. 07 through . 8. A. Discuss the management representation letter with the prospective client's audit committee. 3 However, an auditor may make a proposal for an audit engagement before communicating with the predecessor auditor. Professional ethics and the new audit engagements. B) the prospective client's signature on the engagement letter. Relevant to ACCA Qualification Paper P7 The syllabus for Paper P7, Advanced Audit and Assurance includes Professional Appointments (syllabus reference C4). Audit Engagement Letters 5. The engagement Before accepting an engagement to audit a new client, a CPA is required to obtain: A) an understanding of the prospective client's industry and business. Become a member of the entity's board of directors. Difficulty: Medium Source: AICPA. Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan c. Multiple select After client acceptance, the terms of the engagement are agreed by the auditor with the client. obtain the prospective client's signature on the engagement letter. Terms of Engagement 109 AU-CSection210 Terms of Engagement Source: SAS No. Is prepared for the benefit of the auditor, audit client and general public c. the prospective client's signature on the engagement letter c. Before accepting an engagement to audit a new client, a CPA is required to obtain a. B. an assessment of fraud risk factors likely to cause material misstatements b. The decision by the audit firm to accept or retain a client is crucial because of the potential risk of being associated with certain clients. C 26. Is usually sent by auditor to the client upon the commencement of the audit Before accepting an engagement to audit a new client, a CPA is required to obtain: A The prospective client’s consent to make inquiries of the predecessor auditor Dec 7, 2023 · A CPA must obtain the prospective client's consent to make inquiries of their predecessor auditor before accepting a new audit engagement, as it is a key requirement for understanding potential issues that could affect the audit. A) the auditor’s ability to design audit tests. The prospective client's consent Study with Quizlet and memorize flashcards containing terms like The first phase of the audit process that relates to audit planning is Blank______. Sep 1, 2006 · Client Acceptance 210. make Candidates may have to discuss the importance of acceptance and continuation assessments or to apply the requirements of ISQM 1 in this regard when evaluating whether to accept a new client, undertake additional work for existing clients or accept reappointment for the audit of a continuing client. Before accepting an appointment. The prospective client's signature to a written engagement letter. D. Independent auditor’s report c. State whether the CPA will perform tax or management advisory or other services. Evaluate management's integrity through review of the management representation letter O Assess the auditor's ability to appropriately staff the potential engagement. ACCEPTING NEW AUDIT CLIENTS IFAC’s Code of Ethics for Professional Accountants states: ‘Before accepting a new client relationship, a professional accountant in public practice shall determine whether acceptance would create any threats to compliance with the fundamental principles. The CPA's lack of understanding of the prospective client's operations and industry. The new audit client’s refusal to allow this communication to occur would impact Smith’s decision concerning. , Before accepting an engagement to audit a new client, an auditor is required to A. an understanding of the prospective client's industry and business c. The learning outcomes include the explanation of matters that should be considered and procedures that should be followed by a firm before accepting a new client, a new engagement for an existing client, or agreeing the terms of any new Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to obtain A. Discuss the management representation letter with the prospective client's audit committee. The audit firm or engagement in-charge must investigate the management of new clients to comply with the professional Study with Quizlet and memorize flashcards containing terms like 11. make inquiries of the predecessor auditor Study with Quizlet and memorize flashcards containing terms like Before accepting an engagement to audit a new client, a CPA is required to obtain: An assessment of fraud risk factors likely to cause material misstatements. Dec 15, 2020 · If risk management fails at this point, it is often already too late once the engagement has started and the issues have come to the attention of the audit firm and regulatory agencies. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the, In assessing whether to accept a client for an audit engagement, a CPA should 76. reject the 14. The prospective client’s signature to the engagement letter c. make inquiries of the predecessor auditor after obtaining the consent of the prospective client b. 01 This section addresses the specific responsibilities of the auditor re-garding quality control procedures for an audit of financial statements. The prospective client’s signature to the engagement letter. This year, Wooten Enterprises engaged a new auditor who must: a. Management fails to modify prescribed controls for changes in conditions. 16. Marco Banks earned his CPA the year before and was a newly-minted manager at RHO, LLC, a mid-sized regional accounting firm located in Kansas City, Missouri. There are significant differences between the entity's forecasted financial statements and the financial statements to be audited. slcsuukyufdhuebwmrjt