Which of the following factors most likely would lead a CPA to conclude that a potential audit engagement should not be accepted?
A) There are significant related party transactions that management claims occurred in the ordinary course of business.
B) Internal control activities requiring the segregation of duties are subject to management override.
C) Management continues to employ an inefficient system of information technology to record financial transactions.
D) It is unlikely that sufficient evidence is available to support an opinion on the financial statements.

Question

Quizplus · Accepted Answer

If sufficient evidence is unlikely to be available, the CPA cannot issue an opinion in accordance with auditing standards. Therefore, the potential audit engagement should not be accepted. Choices A, B, and C may indicate some risks, but they do not necessarily prohibit the acceptance of the engagement.

Which of the Following Factors Most Likely Would Lead a CPA