Preliminary engagement activities include
A) Evaluating internal controls.
B) Assessing audit risk at the account balance level.
C) Setting materiality.
D) Performing background checks on top management.

Question

Quizplus · Accepted Answer

Preliminary engagement activities refer to the activities performed by the auditor before starting the audit process. Out of the given options, performing background checks on top management is the only option that is related to preliminary engagement activities. This helps the auditor to identify any potential risks related to management integrity or any related party transactions that may impact the financial statements. The other options, such as evaluating internal controls, assessing audit risk, and setting materiality, are part of the overall audit process but are not specifically related to preliminary engagement activities.

Preliminary Engagement Activities Include