Which of the following communications is most likely to be written before the balance-sheet date?
a. a report to the audit committee on the results of testing of internal control over cash receipts
b. an attorney's letter regarding contingent liabilities
c. confirmation letters to vendors confirming the amounts they owe to the client
d. an engagement letter
Answer: d. an engagement letter
Prior to accepting a new engagement, a public accounting firm should
a. assess the firm's resources to ensure that they are sufficient to permit them to accept the engagement
b. attempt to contact the predecessor auditors
c. all of the answers are correct
d. evaluate the integrity of management
Answer: c. all of the answers are correct
Which of the following procedures would most likely be performed during planning?
a. performing a search for unrecorded liabilities
b. reporting internal control deficiencies to the audit committee
c. surprise counts of the client's petty cash fund
d. identifying related parties
Answer: d. identifying related parties
