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 knowledge of matters that relate to the nature of the entity's business.
C)refer a substantial portion of the audit to another auditor, who will act as the principal auditor.
D)first inform management that an unmodified auditor's opinion cannot be issued.

Question

Quizplus · Accepted Answer

The auditor should obtain knowledge of matters that relate to the nature of the entity's business to be able to plan and perform the audit effectively. This may involve consulting with experts or engaging additional staff with relevant expertise, but the auditor should not refer the entire audit to another auditor unless there are specific reasons for doing so, such as legal or regulatory requirements. The auditor should also inform management of any significant limitations to the audit scope, but it is premature to state that an unmodified opinion cannot be issued before conducting the necessary procedures.

An Auditor Who Accepts an Audit Engagement and Does Not