Please answer Which of the following factors most likely would cause an auditor not to accept a new auditengagement?1. An inadequate understanding of the entity's internal controls.2. The close proximity to the end of the entity's fiscal year.3. Concluding that the entity's management probably lacks integrity.4. The inability to perform preliminary analytical procedures before assessing control risk.

Answered: Which of the following factors most…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter7: Planning The Audit: Identifying, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 22MCQ

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Which of the following factors most likely would cause an auditor not to accept a new audit
engagement?
1. An inadequate understanding of the entity's internal controls.
2. The close proximity to the end of the entity's fiscal year.
3. Concluding that the entity's management probably lacks integrity.
4. The inability to perform preliminary analytical procedures before assessing control risk.

Expert Solution

Step 1

Internal Controls:

Internal controls are the principles, procedures and rules applied by a company to maintain the quality, accuracy and integrity of the financial information. Internal controls are primarily implemented with the purpose of safeguarding the organization, its assets and achieve its objectives.

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