Select the most likely CPA engagement for the given situation.

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Chapter 20, Problem 32OQ

To determine

Select the most likely CPA engagement for the given situation.

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The following are various activities an auditor doesduring audit planning.1. Determine the likely users of the financial statements.2. Identify whether any specialists are required for the engagement.3. Send an engagement letter to the client.4. Tour the client’s plant and offices.5. Compare key ratios for the company to those for industry competitors.6. Review management’s risk management controls and procedures.7. Review accounting principles unique to the client’s industry.8. Identify potential related parties that may require disclosure.For each procedure, indicate which of the first four parts of audit planning the procedureprimarily relates to: (1) accept client and perform initial audit planning; (2) understandthe client’s business and industry; (3) assess client business risk; (4) perform preliminaryanalytical procedures.

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PLEASE ANSWER ALL 7. Which of the following involves coordinating the company’s activities a smooth-running operation?a. Auditingb. Controllingc. Planningd. Directing 8. Which of the following statement about internal reports is true?a. Most internal reports are summarized rather than detailed.b. Internal reports focus on general purpose needs of users.c. The content of internal report extends beyond the double-entry accounting system.d. Internal reports are often very general. 9. Which one of the following describes internal reports?a. They are often audited by CPAs.b. They are highly regulated by SEC.c. They are aggregated.d. They are detailed.