Chapter 3

The first phase of audit planning is risk assessment.

• true

• false

When the prospective client has previously been audited, auditing standards require that the successor auditor make certain inquiries of the predecessor auditor before accepting the engagement.

• true

• false

With few exceptions, the Code of Professional Conduct does not allow an auditor to disclose confidential client information without the client's consent.

• true

• false

If the prospective client refuses to allow the predecessor auditor to communicate with the successor auditor, the successor auditor should have reservations about accepting the client.

• true

• false

In order to properly preplan the audit, the auditor must determine the engagement team requirements and ensure the independence of the audit team and audit firm.

• true

• false

If the internal audit function is competent and objective, the auditor may generally rely on the work of an internal audit function in certain areas to reduce the amount of external audit work in these areas.

• true

• false

All companies must have an audit committee.

• true

• false

The audit committee is directly responsible for the appointment, compensation, and oversight of the work of any accounting firm employed by a public company.

• true

• false

The external auditor is required to make a number of important communications to the audit committee during or at the end of the audit engagement.

• true

• false

The engagement partner is typically responsible for doing the detailed audit testing.

• true

• false