Which of the following factors most likely would cause an auditor to not accept a new audit engagement?
A) An inadequate understanding of the entity's internal control.
B) The close proximity to the end of the entity's fiscal year.
C) The conclusion that the entity's management probably lacks integrity.
D) An inability to perform preliminary analytical procedures before assessing control risk.

Question

Quizplus · Accepted Answer

An auditor is required to consider the integrity of the entity's management as a factor in deciding whether or not to accept an audit engagement. If the auditor concludes that management lacks integrity, it is likely that they would not accept the engagement as there is a risk that the financial statements may contain material misstatements due to fraud or other unethical behavior. Inadequate understanding of internal control, close proximity to the end of the fiscal year, and an inability to perform preliminary analytical procedures are issues that can be addressed during the audit planning process and do not necessarily preclude the acceptance of an audit engagement.

Which of the Following Factors Most Likely Would Cause an Auditor