An auditor who accepts an audit engagement and does not possess the industry expertise of the business entity should:
A)engage financial experts familiar with the nature of the business entity.
B)obtain a knowledge of matters that relate to the nature of the entity's business.
C)refer a substantial portion of the audit to another CPA who will act as the principal auditor.
D)first inform management that an unqualified opinion cannot be issued.

Question

Quizplus · Accepted Answer

An auditor should obtain a knowledge of matters that relate to the nature of the entity's business. This will help the auditor to assess the risks and develop an appropriate strategy for the audit. Engaging financial experts, referring a substantial portion of the audit to another CPA or informing management that an unqualified opinion cannot be issued are not the best choices if the auditor lacks industry expertise.

An Auditor Who Accepts an Audit Engagement and Does Not