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1. Davis, CPA, accepted an engagement to audit the financial statements of Tech Resources, a nonpublic entity. Before
the completion of the audit, Tech requested Davis to change the engagement to a compilation of financial statements.

Before Davis agrees to change the engagement, Davis is required to consider the

Additional Audit Effort Reason Given for
Necessary to Complete the Audit Tech's Request

a. No No
b. Yes Yes
c. Yes No
d. No Yes

2. Silver CPA has been hired by Andrews co, a publically held company, to conduct a review of its interim financial information. While performing review procedures, Silver becomes aware of a significant change in the control activities at one of Andrew's branch locations. Which of the following might Silver consider performing in response to this situation?

A. Making additional inquiries, such as whether management has monitored the changes and considered whether they were operating as intended.
B. Employing analytical procedures with a less precise expectation.
C. Both a and b
D. neither a or b

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Solution Preview

Answer to #1 is YES - YES (B)

Answer to #2 is C. Auditors will definitely ...

Solution Summary

Davis, CPA, accepted an engagement to audit the financial statements of Tech Resources, a nonpublic entity. Before
the completion of the audit, Tech requested Davis to change the engagement to a compilation of financial statements.

Before Davis agrees to change the engagement, Davis is required to consider the

Additional Audit Effort Reason Given for
Necessary to Complete the Audit Tech's Request

a. No No
b. Yes Yes
c. Yes No
d. No Yes

2. Silver CPA has been hired by Andrews co, a publically held company, to conduct a review of its interim financial information. While performing review procedures, Silver becomes aware of a significant change in the control activities at one of Andrew's branch locations. Which of the following might Silver consider performing in response to this situation?

A. Making additional inquiries, such as whether management has monitored the changes and considered whether they were operating as intended.
B. Employing analytical procedures with a less precise expectation.
C. Both a and b
D. neither a or b

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